COUNTRY EDGE APARTMENTS I LIMITED PARTNERSHIP
SECOND AMENDED AND RESTATED
AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP
Dated as of December 1, 1997
COUNTRY EDGE APARTMENTS I LIMITED PARTNERSHIP
TABLE OF CONTENTS
Page
Preliminary Statement ................................... 5
ARTICLE I Defined Terms ............................ 5
ARTICLE II Name and Business ........................ 17
2.1 Name; Continuation ....................... 17
2.2 Office and Resident Agent ................ 17
2.3 Purpose .................................. 18
2.4 Term and Dissolution ..................... 18
ARTICLE III Mortgage, Refinancing and Disposition
of Property ............................ 19
ARTICLE IV Partners; Capital ........................ 20
4.1 Capital and Capital Accounts ............. 20
4.2 General Partners ......................... 21
4.3 Investment Limited Partner, Special Limited
Partner, and Original Limited Partner... 21
4.4 Liability of the Limited Partners......... 21
4.5 Special Rights of the Investment
Limited Partner ........................ 21
4.6 Meetings ................................. 23
ARTICLE V Capital Contributions of the Investment
Limited Partner and the Special Limited
Partner................................. 24
5.1 Payments ................................. 24
5.2 Return of Capital Contributions .......... 28
ARTICLE VI Rights, Powers and Duties of General
Partners ............................... 30
6.1 Authorized Acts .......................... 31
6.2 Restrictions on Authority ................ 31
6.3 Personal Services ........................ 33
6.4 Business Management and Control; Tax
Matters Partner ........................ 33
6.5 Duties and Obligations ................... 34
6.6 Representations and Warranties ........... 37
6.7 Liability on the Permanent Mortgage ...... 41
6.8 Indemnification of the General Partners .. 41
Page
6.9 Indemnification of the Partnership and the
Limited Partners ....................... 42
6.10 Operating Deficits ....................... 43
6.11 Obligation to Complete the Construction
of the Apartment Complex .............. 43
6.12 Certain Payments to the General Partner
and Others ............................. 45
6.13 Delegation of General Partner Authority .. 46
6.14 Assignment to Partnership ................ 46
ARTICLE VII Withdrawal of a General Partner; New
General Partner ........................ 47
7.1 Withdrawal ............................... 47
7.2 Obligation to Continue ................... 47
7.3 Withdrawal of All General Partners ....... 47
7.4 Interest of General Partner After
Permitted Withdrawal ................... 47
7.5 Admission of Additional General Partner(s)
under Certain Circumstances.............. 49
ARTICLE VIII Transferability of Limited Partner
Interests .............................. 50
8.1 Assignments .............................. 50
8.2 Substituted Limited Partner .............. 50
8.3 Restrictions ............................. 50
ARTICLE IX Borrowings................................ 50
9.1 Borrowings ............................... 50
ARTICLE X Profits, Losses, Tax Credits, Distributions
and Capital Accounts ................... 52
10.1 Profits, Losses and Tax Credits .......... 52
10.2 Cash Distributions Prior to Dissolution .. 54
10.3 Distributions Upon Dissolution ........... 56
10.4 Special Provisions ....................... 57
10.5 Authority of the General Partners to Vary
Allocations to Preserve and Protect the
Partners' Intent ....................... 60
ARTICLE XI Management Agent ......................... 61
Page
ARTICLE XII Books and Records, Accounting, Tax
Elections, Etc. ........................ 63
12.1 Books and Records ........................ 63
12.2 Bank Accounts ............................ 63
12.3 Auditors ................................. 63
12.4 Cost Recovery and Elections .............. 64
12.5 Special Basis Adjustments ................ 64
12.6 Fiscal Year .............................. 64
12.7 Information to Partners .................. 64
12.8 Expenses of the Partnership .............. 67
ARTICLE XIII General Provisions ....................... 69
13.1 Restrictions by Reason of Section 708 of
the Code ............................... 69
13.2 Amendments to Certificate ................ 69
13.3 Notices .................................. 70
13.4 Word Meanings ............................ 70
13.5 Binding Effect ........................... 70
13.6 Applicable Law ........................... 70
13.7 Counterparts ............................. 70
13.8 Financing Regulations .................... 70
13.9 Separability of Provisions ............... 71
13.10 Paragraph Titles .........................
71
13.11 Amendment Procedure.......................
71
13.12 Time of Admission ........................
71
Schedule A .......................................... 7
COUNTRY EDGE APARTMENTS I LIMITED PARTNERSHIP
SECOND AMENDED AND RESTATED
AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP
Preliminary Statement
Country Edge Apartments I Limited Partnership (the
"Partnership") was formed as a North Dakota limited partnership
pursuant to an Agreement and Certificate of Limited Partnership
(the "Original Agreement") dated October 25, 1995 by and between
Prairie West, Inc., a North Dakota corporation as General Partner
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ as the Limited Partner (the "Original
Limited Partner"). The Original Agreement was filed in the
Filing Office on November 11, 1995. The Original Agreement was
amended by a Restated Agreement of Limited Partnership on July 1,
1997.
WHEREAS, the parties hereto now desire to enter into this
Second Amended and Restated Agreement of Limited Partnership to:
(i) continue the Partnership, (ii) acknowledge the withdrawal of
the Original Limited Partner, (iii) reaffirm the admission of
Boston Capital Tax Credit Fund IV, L.P. to the Partnership as
Investment Limited Partner, (iv) to admit BCTC 94, Inc. as
Special Limited Partner, (v) reassign the Interests in the
Partnership and (vi) set forth all of the provisions governing
the Partnership and the Partners herein.
NOW, THEREFORE, in consideration of mutual agreements set
forth herein, it is agreed and certified, and the Original
Agreement and the Restated Agreement are hereby amended and
restated in their entirety, as follows:
ARTICLE I
Defined Terms
The defined terms used in this Agreement shall have the
meanings specified below:
Actual Credit means, with respect to a particular year, the
total amount of Tax Credit properly allocable by the Partnership
to the Investment Limited Partner for such year. The Actual
Credit shall be retroactively revised if the amount of Tax Credit
properly allocable to the Investment Limited Partner is revised
after audit.
Additional Limited Partner means any holder of an Interest
designated as an Additional Limited Partner pursuant to Section
4.5(b) or Section 7.4.
Admission Date means the first date on which all parties
hereto shall have executed this Agreement, or, if, pursuant to
the Uniform Act, the Investment Limited Partner shall not be deemed
admitted to the Partnership on such date, then the next date
thereafter on which the Investment Limited Partner shall be
deemed to be admitted to the Partnership under the Uniform Act.
Affiliate means (A) as to the Investment Limited Partner,
the Investment General Partner or Boston Capital, (i) such
Person; (ii) each member of the Immediate Family of such Person;
(iii) each legal representative, successor or assignee of any
Person referred to in the preceding clauses (i) or (ii); (iv)
each trustee of a trust for the benefit of any Person referred to
in the preceding clauses (i) or (ii); or (v) any other Person (a)
who directly or indirectly controls, is controlled by, or is
under common control with such Person, (b) who is an officer of,
director of, partner in or trustee of, or serves in a similar
capacity with respect to, such Person or of which such Person is
an officer, director, partner or trustee, or with respect to
which such Person serves in a similar capacity, (c) who, directly
or indirectly, is the beneficial owner of ten percent (10%) or
more of any class of equity securities of such Person or of which
such Person is directly or indirectly the owner of ten percent
(10%) or more of any class of equity securities, (d) who is an
officer, director, general partner, trustee or holder of ten
percent (10%) or more of the voting securities or beneficial
interests of any Person referred to in the foregoing clauses
(v)(a), (v)(b) or (v)(c) or (e) who, whatever his title, performs
functions for such Person or any Affiliate of such Person similar
to a Chairman or member of the Board of Directors, or executive
officer such as the President, Executive Vice President or Senior
Vice President, Corporate Secretary, or Treasurer, or any Person
holding a five percent (5%) or more equity interest in such
Person, or any Person having the power to direct or cause the
direction of such Person, whether through the ownership of voting
securities, by contract or otherwise; and (B) as to any other
named Person or Persons (i) such Person; (ii) each member of the
Immediate Family of such Person; (iii) each legal representative,
successor or assignee of any Person referred to in the preceding
clauses (i) or (ii); (iv) each trustee of a trust for the benefit
of any Person referred to in the preceding clauses (i) or (ii);
or (v) any other Person (a) who directly or indirectly controls,
is controlled by, or is under common control with such Person,
(b) who owns or controls ten percent (10%) or more of the
outstanding voting securities of such Person, (c) of which ten
percent (10%) or more of the outstanding voting securities is
owned by such Person or any of the Persons referred to in the
foregoing clauses (i) through (iii), (d) who is an officer,
director, partner or trustee of such Person, or (e) for which
such Person acts in the capacity of officer, director, partner or
trustee. An Affiliate of the Investment Limited Partner or of
the Investment General Partner does not include a Person who is a
partner in a partnership or joint venture with the Investment
Limited Partner or any other Affiliate of the Investment Limited
Partner if such Person is not otherwise an Affiliate of the
Investment Limited Partner or the Investment General Partner.
For purposes of this definition, the term Affiliate shall not be
deemed to include any law firm (or member or associate thereof)
providing legal services to the Investment Limited Partner, the
Investment General Partner or any Affiliate of either of them.
Agency means, as applicable, HUD, the Authority, and/or any
other government agency having jurisdiction over the particular
matter to which reference is being made.
Aggregate Cost means the sum of (i) the total Capital
Contributions made or anticipated to be made by the Investment
Limited Partner plus (ii) the proportionate amount of the
mortgage loans on, and other debts related to, the Apartment
Complex, which proportionate amount is equal to the Investment
Limited Partner's initial pro rata interest in the profits,
losses, and tax credits of the Partnership. The amount of the
Aggregate Cost determined upon payment of the last of the four
Installments of the Capital Contribution of the Investment
Limited Partner shall not thereafter be reduced.
Agreement means this Second Amended and Restated Agreement
of Limited Partnership, including Schedule A, as amended from
time to time.
Annual Partnership Management Fee means the fee payable to
the General Partners pursuant to the provisions of Section
6.12(a).
Apartment Complex means the real property located in Fargo,
Cass County, North Dakota as more fully described in the
Mortgage, together with (i) all buildings and other improvements
constructed or to be constructed thereon and (ii) all
furnishings, equipment and personal property covered by the
Mortgage.
Applicable Federal Rate means the "applicable federal rate"
as defined in Section 1274(d) of the Code.
Applicable Percentage has the meaning given to it in Section
42(b) of the Code.
Asset Management Fee means the fee payable to Boston Capital
or an Affiliate thereof pursuant to Section 6.12(c).
Auditors means ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. or such other firm of
independent certified public accountants as may be engaged by the
General Partners with the consent of Boston Capital for the
purposes of preparing the Partnership income tax returns,
auditing the books and records of the Partnership and certifying
financial reports of the Partnership.
Authority means the North Dakota Housing Finance Agency.
BCCLP means Boston Capital Communications Limited
Partnership, a Massachusetts limited partnership, and its
successors and assigns.
Boston Capital means Boston Capital Partners, Inc., a
Massachusetts corporation, its successors and assigns.
Capital Account has the meaning specified in Section 4.1(b).
Capital Contribution means the total value of cash or
property contributed and agreed to be contributed to the
Partnership by each Partner, as shown in Schedule A. Any
reference in this Agreement to the Capital Contribution of a then
Partner shall include a Capital Contribution previously made by
any prior Partner for the Interest of such then Partner.
Capital Transaction means any transaction the proceeds of
which are not includable in determining Cash Flow including,
without limitation, the sale or other disposition of all or
substantially all of the assets of the Partnership, but excluding
the payment of Capital Contributions.
Carryover Certification means the date upon which the
Investment Limited Partner shall have received, in a form and in
substance satisfactory to the Investment Limited Partner, the
certification of the Auditors that as of a date no later than
December 31, 1995, the Partnership had owned land or depreciable
property constituting part of the Apartment Complex and had
incurred capitalizable costs with respect to the Apartment
Complex of at least ten percent (10%) of the Partnership's
reasonably expected basis in the Apartment Complex as of December
31, 1997, so that each building in the Apartment Complex
constitutes a "qualified building" for the purposes of Section
42(h)(1)(E)(ii) of the Code.
Cash Available Debt For Service Requirements for any period
means the excess of (i) all cash actually received by the
Partnership on a cash basis from normal operations during such
period and funds available in Partnership reserves to fund the
cash requirements of the Partnership, but shall exclude the
proceeds of insurance (other than business or rental interruption
insurance), loans, capital transactions or capital contributions
over (ii) all cash requirements of the Partnership properly
allocable to such period of time on an accrual basis (not
including distributions to partners out of Cash Flow of the
Partnership or fees payable from Cash Flow) and, on an annualized
basis, the pro rata portion of all projected expenditures,
including those of a seasonal nature, which might reasonably be
expected to be incurred on an unequal basis during a full annual
period of operation, but specifically excluding all debt service
requirements (including principal payments). For purposes of
this definition, "cash requirements of the Partnership" (as the
term is used in clause (ii) in the preceding sentence), shall
include, to the extent not otherwise covered therein , full
funding of all partnership reserves, normal repairs, real estate
taxes at fully assessed levels assuming a fully improved
property, and necessary capital improvements.
Cash Flow means the profits or losses of the Partnership
from and after the Commencement Date subject to any applicable
Agency or Lender requirements and to the following adjustments:
(a) Cost recovery deductions of buildings, improvements and
personal property and amortization of any financing fees shall
not be deducted;
(b) Mortgage amortization shall be deducted;
(c) Mortgage interest which is included in determining
profits and losses but which is not currently payable in cash
shall be deducted when actually paid;
(d) Payments to reserves under Section 6.5(e) shall be
deducted;
(e) Any amounts paid for capital expenditures shall be
deducted, unless paid from any replacement reserve or funded
through insurance;
(f) The proceeds of any Construction Mortgage or Permanent
Mortgage refinancing, any sale, exchange, eminent domain taking,
damage or destruction (whether insured or uninsured), or other
disposition, of all or any part of the Apartment Complex (other
than the proceeds of any business or rental interruption
insurance) shall not be included;
(g) Any rent or interest subsidy payments shall be
included;
(h) The fees set forth in Sections 6.12, any interest on
the Construction and Development Fee, and any fee payable in
connection with any transaction referred to in clause (f) above
shall not be deducted; and
(i) Prior to Permanent Mortgage Commencement, an amount
equal to the amount, if any, of net rental income applied to
complete the construction of the Apartment Complex pursuant to
Section 6.11 shall be deducted.
Certificate means the Original Certificate of Limited
Partnership as amended from time to time.
Class Contribution means the aggregate Capital Contributions
of all members of a particular class of Partners (i.e., the
General Partners, the Investment Limited Partner, the Special
Limited Partner or any Additional Limited Partner.)
Code means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations (permanent or temporary)
issued thereunder. References herein to any Code section shall
include any successor provisions.
Commencement Date means the first day of the month in which
the Admission Date occurs.
Competitive Real Estate Commission means that real estate or
brokerage commission paid for the purchase or sale of the
Apartment Complex or other Partnership property which is
reasonable, customary and competitive in light of the size, type
and location of the Apartment Complex or other property.
Completion Date means the date upon which the Apartment
Complex has been completed as evidenced by the issuance by the
inspecting architect and by each governmental agency having
jurisdiction of certificates of substantial completion or
occupancy (or local equivalents) with respect to all of the 48
apartment units in the Apartment Complex.
Consent of the Investment Limited Partner means the prior
written consent or approval of the Investment Limited Partner.
Construction and Development Fee means the fee described in
Section 6.12(b).
Construction Lender means State Bank of Fargo, in its
capacity as holder of the Construction Mortgage, or its
successors or assigns in such capacity.
Construction Mortgage means the financing for the
construction of the Apartment Complex provided by the
Construction Lender dated June 12, 1997, in a principal amount of
up to $1,100,000.
Controlling Person has the meaning given to it in the
context of Section 15 of the Securities Act of 1933, as amended.
Credit Period has the meaning given to it in Section
42(f)(1) of the Code.
Credit Recovery Loan means a constructive interest-bearing
advance of the Investment Limited Partner as more fully described
in Section 5.1(f). Credit Recovery Loans and interest thereon
shall not be treated as loans or interest, respectively, for
accounting, tax or liability purposes or for the purposes of
Section 6.2(a)(1). For the purposes of Article X, the term Credit
Recovery Loan shall not include any portion of such an advance
which shall have theretofore been paid to the Investment Limited
Partner.
Credit Shortfall has the meaning given to it in Section
5.1(f).
Disposition (including the forms Dispose and Disposing)
means, as to a Limited Partner, the assignment, sale, transfer,
exchange or other disposition of all or any part of its Interest.
89-12 Requirements means the requirements set forth in
Internal Revenue Procedure 89-12 which are prerequisites to the
issuance, assuming that each General Partner is a corporation, by
the Service of an advance ruling that the Partnership will be
taxed as a partnership and not as an association taxable as a
corporation for Federal income tax purposes.
Entity means any general partnership, limited partnership,
corporation, joint venture, trust, business trust, cooperative or
association.
Event of Bankruptcy means with respect to any Person,
(i) the entry of a decree or order for relief by a court
having jurisdiction in respect of such Person or in respect of
any Controlling Person of such Person in a case under the federal
bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other
similar law, or the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official)
of such Person or of any Controlling Person of such Person for
any substantial part of such Person's property or of the property
of any Controlling Person of such Person, or the issuance of an
order for the winding-up or liquidation of such Person's affairs
and the continuance of any such decree or order unstayed and in
effect for a period of sixty (60) consecutive days, or
(ii) the commencement by such Person or by any Controlling
Person of such Person of a proceeding seeking any decree, order
or appointment referred to in clause (i), the consent by such
Person to any such decree, order or the appointment, or taking of
any action by such Person in furtherance of any of the foregoing.
Filing Office means the Office of the Secretary of State of
the State.
General Partners means the Persons designated as the General
Partners in Schedule A and any Persons who become General
Partners as provided herein, in their capacities as general
partners of the Partnership. At any and all times where there is
only one General Partner, the term General Partners shall mean
such sole General Partner.
Hazardous Material shall have the collective meanings given
to the terms "hazardous material", "hazardous substances" and
"hazardous wastes" in the Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. Sec.
9601 et seq., as amended, and to the term "radioactive materials"
in the context of the Atomic Energy Act, 28 U.S.C. Sec. 2344, and
also includes any meanings given to such terms in any similar
state or local statutes, ordinances, regulations or by-laws. In
addition, the term Hazardous Material also includes oil and any
other substance known to be hazardous.
HUD means the United States Department of Housing and Urban
Development.
Immediate Family means with respect to any Person, such
Person's spouse, parents, parents-in-law, descendants, nephews,
nieces, brothers, sisters, brothers-in-law, sisters-in-law,
children-in-law and grandchildren-in-law.
Initial 100% Occupancy Date means the first date upon which
not less than one hundred percent (100%) of the apartment units
in the Apartment Complex shall have been leased to and physically
occupied by Qualified Tenants .
Installment means an installment of the Investment Limited
Partner's Capital Contribution paid or payable to the Partnership
pursuant to Section 5.1.
Interest means the entire interest of a Partner in the
Partnership at any particular time, including the right of such
Partner to any and all benefits to which a Partner may be
entitled hereunder and the obligation of such Partner to comply
with the terms of this Agreement.
Invested Amount means (i) as to the Investment Limited
Partner, an amount equal to the Capital Contribution of the
Investment Limited Partner divided by 73% and (ii) as to any
other Partner, an amount equal to its Capital Contribution.
Investment General Partner means Boston Capital Associates
IV L.P., a Delaware limited partnership, in its capacity as the
general partner of the Investment Limited Partner, and any other
Person who may become a successor or additional general partner
of the Investment Limited Partner.
Investment Limited Partner means Boston Capital Tax Credit
Fund IV L.P., specifically Series 26 thereof, a Delaware limited
partnership, and any Person or Persons who replace it as
Substituted Limited Partner, but shall not include any Special
Limited Partner or Additional Limited Partner.
Investment Partnership Agreement means the Agreement of
Limited Partnership of the Investment Limited Partner, as amended
from time to time.
Lender means the Construction Lender or Permanent Lender,
each in its capacity as maker of a Mortgage loan, or its
successors and assigns in such capacity.
Limited Partners means the Investment Limited Partner, the
Special Limited Partner and any Additional Limited Partner.
Management Agent means the management and rental agent for
the Apartment Complex.
Management Agreement means the agreement between the
Partnership and the Management Agent providing for the management
of the Apartment Complex.
Management Fee means the Management Fee to which reference
is made in Article XI.A.
Minimum Set-Aside Test means the set aside test selected by
the Partnership pursuant to Section 42(g) of the Code whereby at
least 40% of the units in the Apartment Complex must be occupied
by individuals with incomes equal to 60% or less of area median
income, as adjusted for family size.
Mortgage means the mortgage indebtedness of the Partnership
to the Construction Lender and/or the Permanent Lender; and where
the context admits Mortgage shall mean and include the mortgage
note evidencing such indebtedness, the mortgage or deed of trust
and security agreement securing such indebtedness, the loan
agreement and all other documentation related thereto which
evidence and secure such indebtedness, including any Agency
documentation related thereto.
Original Agreement has the meaning specified in the
Preliminary Statement.
Original Certificate of Limited Partnership has the meaning
specified in the Preliminary Statement.
Original Limited Partner has the meaning specified in the
Preliminary Statement.
Partner means any General Partner or Limited Partner.
Partner Non-Recourse Debt means any Partnership liability
(a) that is considered non-recourse under Treasury Regulation
Section 1.1001-2 or for which the creditor's right to repayment
is limited to one or more assets of the Partnership and (b) for
which any Partner or Related Person bears the economic risk of
loss.
Partner Non-Recourse Debt Minimum Gain means the amount of
partner nonrecourse debt minimum gain and the net increase or
decrease in partner nonrecourse debt minimum gain determined in a
manner consistent with Treasury Regulations Sections 1.704-2(d)
and 1.704(g)(3).
Partnership means the limited partnership continued pursuant
to this Agreement.
Partnership Minimum Gain means the amount determined by
computing, with respect to each Partnership Non-Recourse
Liability, the amount of gain, if any, that would be realized by
the Partnership if it disposed of (in a taxable transaction) the
property subject to such liability in full satisfaction of such
liability, and by then aggregating the amounts so computed. Such
computations shall be made in a manner consistent with Treasury
Regulation Section 1.704-2 (d).
Partnership Non-Recourse Liability means any Partnership
liability (or portion thereof) for which no Partner or Related
Person bears the Economic Risk of Loss.
Permanent Lender means Boston Capital Mortgage Company, in
its capacity as holder of the Permanent Mortgage, or its
successors and/or assigns in such capacity.
Permanent Mortgage means the permanent financing provided,
or to be provided, by the Permanent Lnder for the Apartment
Complex following the completion thereof in the initial principal
amount of $1,100,000.
Permanent Mortgage Commencement means the first date on
which all of the following shall have occurred: (a) the
Completion Date; (b) the principal amount and maturity date of
the Permanent Mortgage shall have been finally determined; and
(c) amortization of the Permanent Mortgage shall have commenced.
Permanent Mortgage Commitment means the first date on which
the Partnership receives the written commitment of the Permanent
Lender to make the Permanent Mortgage.
Person means any individual or Entity.
Project Documents means and includes the Construction
Mortgage and the Permanent Mortgage , the Management Agreement,
all other instruments delivered to (or required by) the
Construction Lender and/or the Permanent Lender and all other
documents relating to the Apartment Complex or the Tax Credit and
by which the Partnership is bound, as amended or supplemented
from time to time.
Projected Credit to the Investment Limited Partner means
$142,093 for 1998; $176,391 per annum for the years 1999 through
2007 (inclusive); and $34,295 for 2008; provided, however, that
the Projected Credit for 2008 shall be reduced by the amount, if
any, by which the Actual Credit for 1998 exceeds $142,093 and
provided further that upon the occurrence of any of the events
described in clauses (i), (ii) and (iii) of Section 5.1(g), the
Projected Credit shall thereafter be the Revised Projected
Credit.
Prospectus means the prospectus contained in the
registration statement (File No. 33-70564) filed with the
Securities and Exchange Commission on behalf of the Investment
Limited Partner for the registration of beneficial assignee
certificates and/or limited partnership interests under the
Securities Act of 1933, as amended, in the final form in which
said prospectus is filed with said Commission and as thereafter
amended and/or supplemented from time to time pursuant to Rule
424 under said Act, or otherwise.
Qualified Basis has the meaning given to it in Section 42(c)
of the Code.
Qualified Income Offset Item means (1) an allocation of loss
or deduction that, as of the end of each year, reasonably is
expected to be made (a) pursuant to Section 704(e)(2) of the Code
to a donee of an interest in the Partnership, (b) pursuant to
Section 706(d) of the Code as the result of a change in any
Partner's Interest, or (c) pursuant to Regulation Section 1.751-
1(b)(2)(ii) as the result of a distribution by the Partnership of
unrealized receivables or inventory items and (2) a distribution
that, as of the end of such year, reasonably is expected to be
made to a Partner to the extent it exceeds offsetting increases
to such Partner's Capital Account which reasonably are expected
to occur during or prior to the Partnership taxable year in which
such distribution reasonably is expected to occur.
Qualified Tenant means a tenant (i) with income not
exceeding that permitted by the Minimum Set-Aside Test who leases
a Low-Income Apartment Unit in the Project under a lease having
an original term of not less than 6 months at a rent which
satisfies the Rent Restriction Test and (ii) complying with any
other requirements imposed by the Project Documents.
Related Person means a person related to a Partner within
the meaning of Treasury Regulation Section 1.752-4(b).
Rent Restriction Test means the test pursuant to Section 42
of the Code whereby the gross rent charged to tenants of the low-
income units in the Apartment Complex may not exceed thirty
percent (30%) of the qualifying income levels.
Rental Achievement means the first time, based upon four
consecutive full calendar months of operation after Permanent
Mortgage Commencement, with each month taken individually, that
Cash Available for Debt Service Requirements (as defined below)
equals or exceeds 1.15 times debt service requirements.
Revised Projected Credit has the meaning given to it in
Section 5.1(g).
Schedule A means Schedule A to this Agreement as amended
from time to time.
Service means the Internal Revenue Service.
Site has the meaning given to it in the Federal
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. Sec. 9601 et seq., as amended, and shall
also include any meaning given to it in any similar state or
local statutes, ordinances, regulations or by-laws.
Special Limited Partner means BCTC 94, Inc., a Delaware
corporation, and any Person who becomes a Special Limited Partner
as provided herein, in its capacity as a special limited partner
of the Partnership.
State means the State of North Dakota.
State Designation means the date upon which the Partnership
receives the allocation by the authorized agency of the State of
Tax Credit for the building(s) constituting the Apartment Complex
in an annual dollar amount of not less than $176,409 of Form(s)
8609. For the purposes of determining State Designation, each
building in the Apartment Complex shall be treated as having
received an allocation of Tax Credit in an amount equal to the
lesser of (i) the amount of Tax Credit carryover allocation
received from the authorized agency of the State as to such
building or (ii) the amount of Tax Credit set forth on the Form
8609 as to such building.
Subordinated Loan means any loan made by the General
Partners to the Partnership pursuant to Section 6.10.
Substituted Limited Partner means any Person who is admitted
to the Partnership as Limited Partner under Section 8.2 or
acquires the Interest of a Limited Partner pursuant to Section
5.2.
Tax Accountants means ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of
Bethesda, Maryland or such other firms of independent certified
public accountants as may be engaged by Boston Capital to review
the Partnership income tax returns.
Tax Credit means the low-income housing tax credit pursuant
to Section 42 of the Code.
Tax Credit Set-Aside means the date upon which the
Partnership receives a preliminary reservation, effective for the
year 1995, the year the Apartment Complex is expected to receive
an allocation of Tax Credit, by the authorized agency of the
State of Tax Credit for the building(s) constituting the
Apartment Complex in an annual dollar amount of not less than
$176,409, which reservation shall not have expired or been
revoked prior to the date on which the First Installment is paid.
Uniform Act means the Uniform Limited Partnership Act as
adopted by the State.
Vessel has the meaning given to it in the Federal
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. Sec. 9601 et seq., as amended, and shall
also include any meaning given to it in any similar state or
local statutes, ordinances, regulations or by-laws.
Withdrawal (including the forms Withdraw, Withdrawing and
Withdrawn) means, as to a General Partner, the occurrence of
death, adjudication of insanity or incompetence, Event of
Bankruptcy, dissolution, liquidation, or voluntary or involuntary
withdrawal or retirement from the Partnership for any reason,
including whenever a General Partner may no longer continue as a
General Partner by law or pursuant to any terms of this
Agreement. Withdrawal shall also mean the sale, assignment,
transfer or encumbrance by a General Partner of its interest as a
General Partner. A General Partner which is a corporation,
limited liability company or partnership shall be deemed to have
sold, assigned, transferred or encumbered its interest as a
General Partner in the event (as a result of one or more
transactions) of any sale, assignment or other transfer (but
specifically excluding any transfer occurring pursuant to the
laws of descent and distribution) of a controlling interest in a
corporate or limited liability company General Partner or of a
general partner interest in a General Partner which is a
partnership. For purposes of this definition of Withdrawal,
"controlling interest" shall mean the power to direct the
management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract
or otherwise.
ARTICLE II
Name and Business
2.1 Name; Continuation
The name of the Partnership is Country Edge Apartments I
Limited Partnership. The Partners agree to continue the
Partnership which was formed pursuant to the provisions of the
Uniform Act.
2.2 Office and Resident Agent
(a) The principal office of the Partnership is ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ at
which office there shall be maintained those records required by
the Uniform Act to be kept by the Partnership. The Partnership
may have such other or additional offices as the General Partners
shall deem desirable. The General Partners may at any time
change the location of the principal office and shall give due
notice thereof to the Limited Partners.
(b) The resident agent in the State for the Partnership for
service of process is as follows:
▇▇▇▇▇ ▇., ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
2.3 Purpose
The purpose of the Partnership is to acquire, hold, invest
in, construct, develop, improve, maintain, operate, lease and
otherwise deal with the Apartment Complex. The Partnership shall
operate the Apartment Complex in accordance with any applicable
Agency regulations and requirements. The Partnership shall not
engage in any other business or activity.
2.4 Term and Dissolution
The Partnership shall continue in full force and effect
until December 31, 2045, except that the Partnership shall be
dissolved and its assets liquidated prior to such date upon:
(a) The sale or other disposition of all or substantially
all of the assets of the Partnership;
(b) A General Partner dying, being adjudicated bankrupt,
insane or incompetent, (if a corporation, limited liability
company or partnership) being dissolved or liquidated, or
voluntarily or involuntarily withdrawing from the Partnership for
any reason, including an inability to continue serving as a
General Partner by law or pursuant to the terms of this
Agreement, if (i) the remaining General Partner(s), if any, shall
fail to continue the business of the Partnership and reconstitute
the Partnership as a successor limited partnership as provided in
Section 7.2 and (ii) the Investment Limited Partner shall fail to
exercise the right provided in Section 7.3;
(c) The election to dissolve the Partnership made in
writing by the General Partners with the Consent of the
Investment Limited Partner and the approval (if required) of any
Agency ;
(d) The entry of a final decree of dissolution of the
Partnership by a court of competent jurisdiction; or
(e) Any other event which causes the dissolution of the
Partnership under the Uniform Act if the Partnership is not
reconstituted pursuant to Section 7.2 or Section 7.3.
Upon dissolution of the Partnership, the General Partners
(or for purposes of this paragraph, their trustees, receivers or
successors) shall cause the cancellation of the Certificate,
liquidate the Partnership assets and apply and distribute the
proceeds thereof in accordance with Section 10.3.
Notwithstanding the foregoing, if, during liquidation, the
General Partners shall determine that an immediate sale of part
or all of the Partnership's assets would be impermissible,
impractical or cause undue loss to the Partners, the General
Partners may defer liquidation of, and withhold from distribution
for a reasonable time, any assets of the Partnership except those
necessary to satisfy Partnership debts and obligations (except
Subordinated Loans).
ARTICLE III
Mortgage, Refinancing and Disposition of Property
A. The General Partners and their Affiliates, jointly and
severally, are hereby authorized to incur personal liability for
the repayment of funds advanced by the Construction Lender (and
interest thereon) pursuant to the Construction Mortgage. However,
from and after Permanent Mortgage Commencement, neither any
General Partner nor any Related Person shall at any time bear,
nor shall the General Partners permit any other Partner or any
Related Person to bear, the Economic Risk of Loss for the payment
of any portion of any Mortgage.
B. The Partnership may decrease, increase or refinance the
Permanent Mortgage and may make any required transfer or
conveyance of Partnership assets for security or mortgage
purposes, provided, however, any such decrease (except through
the thirty year amortization schedule anticipated at Permanent
Mortgage Commencement), increase or refinancing of the Permanent
Mortgage may be made by the General Partners only with the
Consent of the Investment Limited Partner.
C. The Partnership may sell, lease, exchange or otherwise
transfer or convey all or substantially all the assets of the
Partnership only with the Consent of the Investment Limited
Partner. Notwithstanding the foregoing and except as set forth in
Section 6.2(a)(6), no Consent of the Investment Limited Partner
shall be required for the leasing of apartments to tenants in the
normal course of operations or the leasing of all or
substantially all the apartments to a public housing authority at
rents satisfactory to each Agency as expressed in writing.
D. The total compensation to all Persons for the sale of
the Apartment Complex shall be limited to a Competitive Real
Estate Commission, not to exceed six percent (6%) of the contract
price for the sale of the Apartment Complex.
ARTICLE IV
Partners; Capital
4.1 Capital and Capital Accounts
(a) The Capital Contribution of each Partner shall be as
set forth on Schedule A. No interest shall be paid on any
Capital Contribution. No Partner shall have the right to
withdraw its Capital Contribution or to demand and receive
property of the Partnership in return for its Capital
Contribution, except as may be specifically provided in this
Agreement or required by law.
(b) An individual Capital Account shall be established and
maintained on behalf of each Partner, including any additional or
substituted Partner who shall hereafter receive an interest in
the Partnership. In accordance with Treasury Regulation Section
1.704-1(b), the Capital Account of each Partner shall consist of
(i) the amount of cash such Partner has contributed to the
Partnership plus (ii) the fair market value of any property such
Partner has contributed to the Partnership net of any liabilities
assumed by the Partnership or to which such property is subject
plus (iii) the amount of profits or income (including tax-exempt
income) allocated to such Partner less (iv) the amount of losses
and deductions allocated to such Partner less (v) the amount of
all cash distributed to such Partner less (vi) the fair market
value of any property distributed to such Partner net of any
liabilities assumed by such Partner or to which such property is
subject less (vii) such Partner's share of any other expenditures
which are not deductible by the Partnership for Federal income
tax purposes or which are not allowable as additions to the basis
of Partnership property and shall be (viii) subject to such other
adjustments as may be required under the Code. The Capital
Account of a Partner shall not be affected by any adjustments to
basis made pursuant to Section 743 of the Code but shall be
adjusted with respect to adjustments to basis made pursuant to
Section 734 of the Code.
The original Capital Account established for any Substituted
Partner (as hereinafter defined) shall be in the same amount as,
and shall replace, the Capital Account of the Partner which such
Substituted Partner succeeds, and, for the purposes of this
Agreement, such Substituted Partner shall be deemed to have made
the Capital Contribution, to the extent actually paid in, of the
Partner which such Substituted Partner succeeds. The term
"Substituted Partner" as used in this paragraph, shall mean a
Person who shall become entitled to receive a share of the
allocations and distributions of the Partnership by reason of
such Person succeeding to all or any part of the Interest of a
Partner by assignment of all or any part of a Partner's Interest.
To the extent a Substituted Partner receives less than 100% of
the Interest of a Partner he succeeds, the original Capital
Account of such transferee Substituted Partner and his Capital
Contribution shall be in proportion to the portion of the
transferor Partner's Interest prior to the transfer which the
transferee receives, and the Capital Account of the transferor
Partner who retains a portion of his former Interest and his
Capital Contribution shall continue, and not be replaced, in
proportion to the portion of the transferor Partner's Interest
prior to the transfer which the transferor Partner retains.
Nothing in this Section 4.1(b) shall affect the limitations on
transferability of Interests set forth in Article VII or Article
VIII.
4.2 General Partners
The name, address and Capital Contribution of each General
Partner are as set forth on Schedule A.
4.3 Investment Limited Partner, Special Limited Partner and
Original Limited Partner
The Original Limited Partner hereby withdraws as a limited
partner of the Partnership and acknowledges that he no longer has
any Interest in, or rights or claims against, the Partnership as
a Limited Partner as of the Admission Date. The Investment
Limited Partner and the Special Limited Partner are hereby
admitted as the sole Limited Partners in substitution for the
Original Limited Partner as of the Admission Date and agree to be
bound by the terms and provisions of the Project Documents and
this Agreement. The names and addresses of the Investment
Limited Partner and the Special Limited Partner are as set forth
on Schedule A. The General Partners shall have no authority to
admit additional Limited Partners without the Consent of the
Investment Limited Partner.
4.4 Liability of the Limited Partners
None of the Investment Limited Partner, the Special Limited
Partner and any Person who becomes an Additional Limited Partner
shall be liable for any debts, liabilities, contracts or
obligations of the Partnership and shall only be liable to pay
their respective Capital Contributions as and when the same are
due hereunder and under the Uniform Act.
4.5 Special Rights of the Investment Limited Partner
(a) Notwithstanding any other provision herein, to the
extent the law of the State is not inconsistent, the Investment
Limited Partner shall have the right, subject to the prior
written consent of any Agency (if such consent is required) to:
(i) amend this Agreement in any particular;
(ii) dissolve the Partnership;
(iii) remove any General Partner and elect a new General
Partner (A) on the basis of the performance and discharge of such
General Partner's obligations constituting fraud, bad faith,
negligence, misconduct or breach of fiduciary duty, or (B) upon
the occurrence of any of the following: (1) such General Partner
shall have violated any provisions of any Project Document or
other document required in connection with any Mortgage, or any
provisions of any Agency regulations applicable to the Apartment
Complex; (2) such General Partner shall have violated any
provision of this Agreement, including, but not limited to, any
obligation to fund any Partnership expense under Section 6.10, or
such General Partner shall have violated any provision of
applicable law; (3) any Mortgage shall have gone into default; or
(4) such General Partner shall have conducted its own affairs or
the affairs of the Partnership in such a manner as would (a)
cause the termination of the Partnership for Federal income tax
purposes; or (b) cause the Partnership to be treated for Federal
income tax purposes as an association taxable as a corporation;
(iv) continue the business of the Partnership with a
substitute General Partner; and
(v) approve or disapprove the sale of all or substantially
all of the assets of the Partnership.
(b) Upon the removal of a General Partner, (i) without any
further action by any Partner, the Special Limited Partner shall
automatically become a General Partner and acquire in
consideration of a cash payment of $100 such portion of the
Interest of the removed General Partner as counsel to the
Investment Limited Partner shall determine is the minimum
appropriate interest in order to assure the continued status of
the Partnership as a partnership under the Code and under the
Uniform Act, (ii) such portion of the economic Interest as an
Additional Limited Partner, (iii) the economic Interest of the
Special Limited Partner as the Special Limited Partner shall
continue unaffected by the new status of the Special Limited
Partner as a General Partner, and (iv) the new General Partner
(which shall also continue to be the Special Limited Partner)
shall automatically be delegated all of the powers and duties of
the General Partners pursuant to Section 6.13. The former
Special Limited Partner of any successor General Partner proposed
by the former Special Limited Partner shall have the option,
exercisable in its sole discretion, to acquire the remainder of
the Additional Limited Partner Interest, or any portion thereof,
of any removed General Partner upon payment of the agreed or then
present fair market value of such interest or portion thereof.
Any dispute as to the value of the Interest or portion thereof to
be acquired pursuant to the immediately preceding sentence shall
be submitted to a committee composed of three qualified real
estate appraisers, one chosen by the removed General Partner, one
chosen by the successor General Partner or the Investment Limited
Partner, as the case may be, and the third chosen by the two so
chosen. The proceedings of such committee shall conform to the
rules of the American Arbitration Association, as far as
appropriate, and its decision shall be final and binding. The
expense of arbitration shall be born equally by the removed
General Partner and the Partnership. The method of payment to
the removed General Partner shall be fair and must protect the
solvency and liquidity of the Partnership. The method of payment
will be deemed presumptively fair where it provides for an
interest-bearing promissory note coming due in no less than five
(5) years with equal installments each year. In addition, upon
removal, the Partnership must promptly pay to the removed General
Partner all amounts then accrued and owing to the removed General
Partner; provided, however, that notwithstanding the language of
Section 6.12, Article X, Article XI and any other provision
hereof, no removed General Partner or any Affiliate thereof shall
be entitled to receive any fee, compensation or other
remuneration from the Partnership, other than (i) the above-
described payment for the Interest, or portion thereof, of the
removed General Partner, and (ii) any such fee, compensation or
other remuneration which had already been earned in full prior
the date of such removal. The Partnership is not authorized to
enter into any arrangement whereby any fee, compensation or other
remuneration could be payable directly or indirectly to any
General Partner or Affiliate thereof in a manner inconsistent
with the immediately preceding sentence unless the prior written
consent of the Special Limited Partner shall have been obtained
to such particular agreement. The Partnership may offset against
any payments to a General Partner removed under this Section 4.5
any damages suffered by the Partnership as a result of any breach
of the obligations of such General Partner hereunder. A General
Partner so removed will not be liable as a General Partner for
any obligations of the Partnership after the effective date of
its removal. Each General Partner hereby grants to the Special
Limited Partner an irrevocable (to the extent permitted by
applicable law) power of attorney coupled with an interest to
execute and deliver any and all documents and instruments on
behalf of such General Partner and the Partnership as the Special
Limited Partner may deem to be necessary or appropriate in order
to effect the provisions of this Section 4.5.
4.6 Meetings
The General Partner or Limited Partners holding more than
ten percent (10%) of the then outstanding Limited Partner
Interests may call meetings of the Partnership for any matters
for which the Limited Partners may vote as set forth in this
Agreement. A list of the names and addresses of all Limited
Partners shall be maintained as part of the books and records of
the Partnership and shall be made available upon request to any
Limited Partner or his representative at his cost. Upon receipt
of a written request either in person or by certified mail
stating the purpose(s) of the meeting, the General Partners shall
provide all Limited Partners within ten (10) days after receipt
of said request, written notice (either in person or by certified
mail) of a meeting and the purpose of such meeting to be held on
a date not less then fifteen (15) nor more than sixty (60) days
after receipt of said request, at a time convenient to the
Limited Partners. All meetings shall be held at the principal
office of the Partnership.
ARTICLE V
Capital Contributions of the Investment Limited Partner
and the Special Limited Partner
5.1 Payments
(a) The Special Limited Partner's Capital Contribution of
$10 shall be paid in full in cash on the Admission Date. The
Investment Limited Partner's Capital Contribution shall be paid
in cash installments (the "Installments"), as follows:
(1) $564,509 (the "First Installment") on the latest of (i)
the Admission Date, (ii) Tax Credit Set-Aside, (iii) Closing of
the Construction Mortgage; (iv) Permanent Mortgage Commitment;
or (v) Carryover Certification
(2) $282,226 (the "Second Installment") on the latest to
occur of (i) State Designation; (ii) the Completion date; (iii)
Cost Certification; or (iv) receipt of an updated title policy
satisfactory to the Investment Limited Partner; and
(3) $262,170 (the "Third Installment") on the latest of (i)
the Initial 100% Occupancy Date, (ii) Permanent Mortgage
Commencement; or (iii) Rental Achievement; and
(4) $20,000 (the "Fourth Installment") upon receipt of a
tax return for the year in which Rental Achievement occurs;
provided, however, that the General Partner shall give the
Investment Limited Partner not less than twenty-one (21) days'
written notice prior to the due date of each Installment
subsequent to the First Installment.
(b) The obligation of the Investment Limited Partner to pay
each Installment is conditioned upon delivery by the General
Partners to the Investment Limited Partner of a written
certificate (the "Payment Certificate") stating that as of the
date of such certificate (i) all the conditions to the payment of
such Installment have been satisfied and (ii) all representations
and warranties of the General Partner contained in this Agreement
are true and correct. Except as provided in the final sentence
of this Section 5.1(b), acceptance by the Partnership of any
Installment shall constitute a confirmation that, as of the date
of payment, all such conditions are satisfied and all such
representations and warranties are true and correct. The
obligation of the Investment Limited Partner to pay the First
Installment is also conditioned upon delivery by the General
Partner to the Investment Limited Partner of (i) a legal opinion
of independent counsel to the Partnership, which opinion must be
satisfactory to the Investment Limited Partner as to form,
content and identity of counsel and (ii) a photocopy of an ATLA
Owner's Policy of Title or an endorsement thereto, issued to the
Partnership with respect to the Apartment Complex with an
effective date on or after the Admission Date, in an insured
amount of not less than the appraised value of the Property, but
in no event less than the sum of all Permanent Mortgage loans and
the Invested Amount of the Investment Limited Partner and the
General Partner from a title insurance company reasonably
satisfactory to the Investment Limited Partner containing, inter
alia, "Fairways", "Non-Imputation", "Date Down" and "Zoning"
endorsements and evidencing the Partnership's ownership of the
Apartment Complex, subject only to such exclusions, exceptions,
conditions and stipulations as shall be acceptable to the
Investment Limited Partner, in its sole discretion. In no event
shall any Installment become due until all of the conditions for
all of the Installments listed prior to the Installment in
question in Section 5.1(a) shall have been satisfied and all of
such prior Installments shall have become due. Notwithstanding
the foregoing, however, if at any time prior to the date when an
Installment becomes due and payable, the Partnership has an
"Operating Deficit" (expenses in excess of revenues which the
General Partners would be required to fund pursuant to Section
6.10), then the Investment Limited Partner may, at its option,
waive the requirement of the delivery of the Payment Certificate
or any other condition with respect to part or all of such
Installment and pay such part or all of such Installment, provided
that the proceeds of the amount so paid are used by the
Partnership to fully fund such Operating Deficit; provided,
however, that if the proceeds of such amount so paid are
designated in Section 6.12 or Section 10.2(c) to be used to pay
fees or special distributions, then such proceeds shall be
utilized to pay such fees or special distributions and the
recipients thereof shall be required to, and hereby agree to,
utilize the proceeds of such fees or special distributions to
fund such Operating Deficit, in which case the Investment Limited
Partner is hereby authorized to directly fund such Operating
Deficit with the funds so applied being deemed to have been paid
as aforesaid.
(c) The Payment Certificate for each Installment shall be
dated and delivered not less than ten (10) nor more than thirty
(30) days prior to the due date for such Installment.
(d) If, as of the date when an Installment would otherwise
be due, any statement required to be made in the Payment
Certificate for such Installment cannot be truthfully made, the
General Partners shall notify the Investment Limited Partner of
the reason why such statement would be untrue if made, and the
Investment Limited Partner shall not be required to pay such
Installment; provided, however, that if (i) any such statement
can subsequently be truthfully made and (ii) the Investment
Limited Partner shall not have irrevocably lost, in the good
faith judgment of the Investment General Partner, any material
tax or other benefits hereunder, then the Investment Limited
Partner shall pay such Installment to the Partnership thirty (30)
days after delivery by the General Partners to the Investment
Limited Partner of the Payment Certificate together with an
explanation of the manner in which each such statement had become
true.
(e) If with respect to any year all or a portion of which
occurs during the 60-month period commencing on the later of (i)
the Admission Date or (ii) the date on which the first building
in the Apartment Complex is placed in service for the purposes of
Section 42 of the Code (a "Reduction Year") the Actual Credit is
or was less than the Projected Credit, then the General Partners
shall pay to the Investment Limited Partner the Reduction Amount.
The Reduction Amount shall be equal to the sum of (A) the excess
of the Projected Credit for such year over the Actual Credit for
such year multiplied by .81 plus (B) the amount of any recapture,
interest or penalty payable by the limited partners and/or the
holders of beneficial assignee certificates of the Investment
Limited Partner as a result of such shortfall, assuming that each
limited partner and/or each holder of a beneficial assignee
certificate in the Investment Limited Partner used all of the Tax
Credits allocated to him in the year of allocation. The Auditors
shall make their determination of the amount of the Actual Credit
with respect to each Reduction Year within thirty (30) days
following the end of such year. The Capital Contribution of the
Investment Limited Partner shall be subject to reduction as
hereinabove described with respect to each Reduction Year. Any
reduction in the Capital Contribution of the Investment Limited
Partner shall, at the option of the Investment Limited Partner,
either (i) first be applied to reduce the Installment next due to
be paid by the Investment Limited Partner, with any portion of
such Reduction Amount in excess of the amount of such Installment
then being applied to reduce succeeding Installments, provided,
that if no further Installments remain to be paid or if the
Reduction Amount shall exceed the sum of the amounts of the
remaining Installments, then the entire Reduction Amount or the
balance of the Reduction Amount, as the case may be, shall be
paid by the General Partners to the Investment Limited Partner
promptly after demand is made therefor, as a payment of damages
for breach of warranty or (ii) be paid in its entirety by the
General Partners to the Investment Limited Partner promptly after
demand is made therefor, as a payment of damages for breach of
warranty.
(f) In the event that, for any reason, at any time after
the end of the year during which there occurs the sixty (60)-
month anniversary of the later of (i) the Admission Date or (ii)
the date on which the first building in the Apartment Complex is
placed in service for the purposes of Section 42 of the Code, the
amount of the Actual Credit shall be less than the Projected
Credit with respect to any fiscal year of the Partnership (such
difference being hereinafter referred to as a "Credit
Shortfall"), the Investment Limited Partner shall be treated as
having made a constructive advance to the Partnership with
respect to such year (a "Credit Recovery Loan"), which shall be
deemed to have been made on January 1 of such year in an amount
equal to the sum of (i) the Credit Shortfall for such year plus
(ii) the amount of any recapture, interest or penalty payable by
the limited partners and/or the holders of beneficial assignee
certificates of the Investment Limited Partner as a result of the
Credit Shortfall for such year, assuming that each limited
partner and/or holder of a beneficial assignee certificate in the
Investment Limited Partner used all of the Tax Credits allocated
to him in the year of allocation. Credit Recovery Loans shall be
deemed to bear simple (not compounded) interest from the
respective dates on which such principal advances shall have been
deemed to have been made under this Section 5.1(f) at 9% per
annum. Credit Recovery Loans shall be payable by the Partnership
as provided in Section 10.2(b), Clause Third.
(g) If, as of the Completion Date and based upon the Cost
Certification, it is determined that the Apartment Complex will
be eligible to receive Tax Credits in an annual amount of less
than $176,409, or as of the Completion Date the product of the
Apartment Complex's Eligible Basis and its Applicable Percentage
is determined by the Auditors or the Service to be such that the
Apartment Complex will not be eligible to receive Tax Credits in
an annual dollar amount of at least $176,409, then there shall be
a reduction in the Investment Limited Partner's Capital
Contribution in an amount equal to the product of (A) difference
between (i) $176,409 and (ii) the annual amount of Tax Credit
allocated and available to the Partnership and (B) 8.1.
(h) In the event that (i) State Designation does not occur
by Admission, or (ii) by Admission, the Limited Partners shall
not have received a written certification of the Auditors in a
form and in substance satisfactory for the purpose of achieving
Cost Certification and indicating that the product of the
Apartment Complex's Eligible Basis and its Applicable Percentage
is such that the Apartment Complex will be eligible to receive
Tax Credit in an annual amount of at least $176,409 or (iii) at
any time after the Completion Date the product of the Apartment
Complex's Eligible Basis and its Applicable Percentage is
determined by the Auditors, the Tax Accountants or the Service to
be such that the Apartment Complex will not be eligible to
receive Tax Credit in an annual dollar amount of at least
$176,409, then (a) the General Partners shall pay to the
Investment Limited Partner an amount equal to 99.99% of the
product of (A) difference between (i)$176,409 and (ii) the total
amount of Tax Credit allocated and available to the Partnership
and (B) .81 and (b) the Projected Credit for each year shall
thereafter be redefined to mean 99.99% of the total amount of Tax
Credit actually so allocated and available to the Partnership for
such year (the "Revised Projected Credit").
5.2 Return of Capital Contributions
(a) Failure to Achieve Development and/or Tax Credit
Benchmarks and Standards. If (i) all of the apartment units in
the Apartment Complex shall not have been placed in service by
December 31, 1997, (or any later date fixed by the General
Partners with the Consent of the Investment Limited Partner) or
(ii) by December 31, 1998, (or any later date fixed by the
General Partners with the Consent of the Investment Limited
Partner) less than 100% apartment units in the Apartment Complex
shall have been occupied by Qualified Tenants, or (iii) Permanent
Mortgage Commencement shall not have occurred prior to December
31, 1998, (or any later date fixed by the General Partners with
the Consent of the Investment Limited Partner), or (iv) State
Designation shall not have occurred by August 30, 1998, (or any
later date fixed by the General Partner with the Consent of the
Investment Limited Partner), or (v) the Partnership shall fail to
meet the Minimum Set-Aside Test or the Rent Restriction Test by
the close of the first year of the Credit Period and/or fails to
continue to meet either of those Tests at any time during the
sixty (60)-month period commencing on such date or (vi) prior to
Permanent Mortgage Commencement, (a) foreclosure proceedings
shall have commenced under the Construction Mortgage and such
proceedings shall not have been dismissed within sixty (60) days,
(b) any of the commitments of any Lender or Agency to provide
the Permanent Mortgage and/or any subsidy financing shall be
terminated or withdrawn and not reinstated or replaced within
ninety (90) days with terms equally or more favorable to the
Investment Limited Partner or terms for which the Consent of the
Investment Limited Partner and (if required) the approval of any
Lender or Agency shall have been obtained, or (c) the
Construction Lender shall have irrevocably refused to make any
further advances under the Construction Mortgage and such
decision shall not have been reversed or the Construction Lender
replaced within sixty (60) days, or (vii) if by Admission (or any
later date fixed by the General Partners with the Consent of the
Investment Limited Partner), the Investment Limited Partner shall
not have received a written certification of the Auditors, in a
form and in substance satisfactory to Boston Capital, as to the
respective amounts of the Qualified Basis and the Applicable
Percentage pertaining to each building in the Apartment Complex,
or (viii) if by April 30, 1999, Rental Achievement has not been
achieved or, (ix) Carryover Certification has not been achieved
by December 31, 1995, or (x) if at any time it is determined by
the Auditors, the Tax Accountants, or the Service that as of
December 31, 1995, the Partnership did not own land or
depreciable property constituting part of the Apartment Complex
and/or had not incurred capitalizable costs with respect to the
Apartment Complex of at least ten percent (10%) of the
Partnership's reasonable expected basis in the Apartment Complex
as of December 31, 1997, then the General Partners shall, within
fifteen (15) days of the occurrence thereof, send to the
Investment Limited Partner and the Special Limited Partner notice
of such event and of the General Partners' obligation to
repurchase the Interests of the Investment Limited Partner and
the Special Limited Partner by paying to the Investment Limited
Partner and the Special Limited Partner an amount equal to each
such Partner's Invested Amount in the event the Investment
Limited Partner and/or the Special Limited Partner so require.
If either the Special Limited Partner or the Investment Limited
Partner elects to require a repurchase of its Interest and the
payment to it of an amount equal to its Invested Amount, it shall
send notice thereof to the Partnership within thirty (30) days
after the mailing date of the General Partners' notice (or at any
time after the occurrence of any of the foregoing if the General
Partners shall not have sent such a notice thereof) and the
General Partners shall within thirty (30) days thereafter
repurchase the Interest of such Partner by paying to each such
Partner an amount equal to its Invested Amount plus the amount of
any third party costs incurred by or on behalf of such Partner in
implementing this Section 5.2(a).
(b) Lender Disapproval. If the Construction Lender and/or
the Permanent Lender shall disapprove, or fail to give any
required approval of, the Investment Limited Partner and/or the
Special Limited Partner as a Limited Partner hereunder within one
hundred eighty (180) days of the Admission Date, then the Partner
being disapproved or not approved shall, effective as of such
time or such later time as may be selected by the Partner being
disapproved or not approved shall, effective as of such time or
such later time as may be selected by the Partner being
disapproved or not approved (or such other time as may be
specified by the Construction Lender and/or the Permanent Lender
in its disapproval),at the option of the Partner being
disapproved or not approved (if not directed by the Construction
Lender and/or the Permanent Lender in to withdraw), cease to be
a Limited Partner. The General Partners shall, within ten (10)
days of the effective date of such cessation, pay to the Partner
being disapproved or not approved an amount equal to its Invested
Amount plus the amount of any third party costs, incurred by or
on behalf of such Partner in implementing this Section 5.2(b).
(c) Substitution and Indemnification. Upon receipt by the
Investment Limited Partner and/or the Special Limited Partner of
the amount due to it pursuant to either Section 5.2(a) or Section
5.2(b) of an amount equal to the sum of its Investment Amount
plus the amount of any third party costs, the Interest of such
Partner shall terminate, and the General Partners shall indemnify
and hold harmless such Partner from any losses, damages, and
liabilities to which such Partner (as a result of its
participation hereunder) may be subject.
(d) Waiver of Repurchase Right. The Investment Limited
Partner shall have the right to irrevocably waive its right to
have its Interest repurchased pursuant to any clause or clauses
of Section 5.2(a), or any portion thereof, at any time during
which any of such rights shall be in effect. Such a waiver shall
be exercised by delivery to the General Partner of a written
notice stating that the rights being waived pursuant to any
specified clause or clauses of Section 5.2(a), or any specified
portion thereof, are thereby waived from that date forward.
(e) Additional General Partner. If the General Partners
shall fail to make on the due date therefor any payment required
under Section 5.2(a) or Section 5.2(b), time being of the
essence, at any time thereafter the Special Limited Partner shall
have the option, exercisable in its sole discretion, to be
admitted as an additional General Partner, with the same
collective economic interest in the Partnership as a General
Partner and a Special Limited Partner as the economic interest in
the Partnership which it formerly held as a Special Limited
Partner. Upon any such admission of the Special Limited Partner
as an additional General Partner, each of the other General
Partners hereby agrees that all of its rights and powers
hereunder as a General Partner shall automatically be irrevocably
delegated to the Special Limited Partner pursuant to Section 6.13
without the necessity of any further action by any Partner,
except as required by the Uniform Act. Each Partner hereby
grants to the Special Limited Partner an irrevocable (to the
extent permitted by applicable law) power of attorney coupled
with an interest to take any action and to execute, deliver and
file or record any and all documents and instruments on behalf of
such Partner and the Partnership as the Special Limited Partner
may deem necessary or appropriate in order to effectuate the
provisions of this Section 5.2(e); provided, however, this power
of attorney shall be limited to the execution, delivery, filing
and recording of documents and instruments pertaining to the
Partnership and Partnership property, and shall not extend to
unrelated business affairs or property of the General Partner.
The admission of the Special Limited Partner as an additional
General Partner shall not relieve any other General Partner of
any of its economic obligations hereunder, and each other General
Partner shall fully indemnify and hold harmless the additional
General Partner against any and all losses, judgments,
liabilities, expenses and amounts paid in settlement of any
claims sustained in connection with its capacity as a General
Partner.
ARTICLE VI
Rights, Powers and Duties of General Partners
6.1 Authorized Acts
Subject to Section 6.2, Section 6.3, and all other
provisions of this Agreement, the General Partners for, in the
name and on behalf of the Partnership, are hereby authorized to
do the following in furtherance of the purposes of the
Partnership:
(1) To acquire by purchase, lease, exchange or otherwise any
real or personal property;
(2) To construct, rehabilitate, operate, maintain, finance
and improve, and to own, sell, convey, assign, mortgage or lease
any real estate and any personal property;
(3) To borrow money and issue evidences of indebtedness and
to secure the same by mortgage, pledge or other lien on the
Apartment Complex or any other assets of the Partnership;
(4) To execute the Construction and Permanent Mortgages, the
other Project Documents and all such other documents as the
General Partners deem necessary or appropriate in connection with
the acquisition, development and financing of the Apartment
Complex;
(5) To prepay in whole or in part, refinance or modify the
Construction and Permanent Mortgages or any other financing
affecting the Apartment Complex;
(6) To employ the Management Agent (which may be an
Affiliate of the General Partners) and to pay reasonable
compensation for its services;
(7) To employ their respective Affiliates to perform
services for, or sell goods to, the Partnership;
(8) To execute contracts with the State or any subdivision
or agency thereof or any other government agency to make
apartments or tenants in the Apartment Complex eligible for any
public-subsidy program;
(9) To execute leases of some or all of the apartment units
of the Apartment Complex to a public housing authority and/or to
a non-profit corporation, cooperative or other non-profit Entity;
and
(10) To enter into any kind of activity and to perform and
carry out contracts of any kind which may be lawfully carried on
or performed by a partnership and to file all certificates and
documents which may be required under the laws of the State.
6.2 Restrictions on Authority
(a) Notwithstanding any other Section of this Agreement, the
General Partners shall have no authority to perform any act in
violation of applicable law, Agency or other government
regulations, requirements of any Lender, or the Project
Documents. In the event of any conflict between the terms of this
Agreement and any applicable Agency or other government
regulations or requirements of any Lender, the terms of such
regulations or requirements shall govern. Neither shall the
General Partners have any authority to do any of the following
acts without the Consent of the Investment Limited Partner:
(1) To borrow in excess of $10,000 in the aggregate at any
one time outstanding on the general credit of the Partnership,
except borrowings constituting Subordinated Loans;
(2) To borrow from the Partnership or commingle Partnership
funds with funds of any other Person;
(3) Following the Completion Date, to construct any new or
replacement capital improvements on the Apartment Complex which
substantially alter the Apartment Complex or its use or which are
at a cost in excess of $10,000 in a single Partnership fiscal
year, except (a) replacements and remodeling in the ordinary
course of business or under emergency conditions or (b)
construction paid for from insurance proceeds;
(4) To acquire any real property in addition to the
Apartment Complex;
(5) Following Permanent Mortgage Commencement, to increase,
decrease (except through the twenty-two-year amortization
provided for in the Permanent Mortgage Commencement), modify the
terms of or refinance the Permanent Mortgage;
(6) To rent apartments in the Apartment Complex such that
the Apartment Complex would not meet the requirements of the
Minimum Set-Aside Test or the Rent Restriction Test;
(7) To sell, exchange or otherwise convey or transfer the
Apartment Complex or substantially all the assets of the
Partnership;
(8) To terminate any agreement with any Agency;
(9) To execute contracts with any Agency, the State or any
subdivision or agency thereof or any other government agency to
make apartments or tenants in the Apartment Complex eligible for
any public-subsidy program;
(10) To execute leases of some or all of the apartment units
of the Apartment Complex to a public housing authority and/or to
a non-profit corporation, cooperative or other non-profit Entity;
(11) To amend the Construction Contract, except for change
orders approved by the Lender;
(12) To pledge or assign any of the Capital Contribution of
the Investment Limited Partner or the proceeds thereof; or
(13) To do any act required to be approved or ratified by
all limited partners under the Uniform Act.
(b) Neither the Investment General Partner nor any Affiliate
thereof shall be given an exclusive right to sell, or exclusive
employment to sell, the Apartment Complex.
6.3 Personal Services
No General Partner or Affiliate thereof shall receive any
salary or other direct or indirect compensation for any services
or goods provided in connection with the Partnership or the
Apartment Complex, except as may be specifically provided in
Section 6.12 and Article XI or as to which the prior written
consent of the Special Limited Partner shall have been obtained
to the precise terms thereof prior to the commencement of such
services or the provision of such goods. Any Partner may engage
independently or with others in other business ventures of every
nature and description including the ownership, operation,
management, syndication and development of competing real estate;
neither the Partnership nor any other Partner shall have any
rights in and to such independent ventures or the income or
profits derived therefrom.
6.4 Business Management and Control; Tax Matters Partner
Subject to the provisions of this Agreement, the General
Partners shall have the exclusive right to control the business
of the Partnership. The Investment Limited Partner shall have no
right to take part in the management or control of the business
of the Partnership or to transact any business in the name of the
Partnership. No provision of this Agreement which makes the
Consent of the Investment Limited Partner a condition for the
effectiveness of an action taken by the General Partners is
intended, and no such provision shall be construed, to give the
Investment Limited Partner any participation in the control of
the Partnership business. Each of the Special Limited Partner
and the Investment Limited Partner hereby consents to the
exercise by the General Partners of the powers conferred on them
by law and this Agreement, and the General Partners agree to
exercise control of the business of the Partnership only in
accordance with the provisions of this Agreement. All Partners
hereby agree that Prairie West, Inc. shall serve as the "Tax
Matters Partner." In the case of litigation, the Tax Matters
Partner is required to file suit in the United States Tax Court
unless the Consent of the Investment Limited Partner is obtained
to file suit in the United States Claims Court or the United
States District Court. Nothing herein shall be construed to
restrict the Partnership from engaging the Auditors to assist the
Tax Matters Partner in discharging its duties hereunder.
6.5 Duties and Obligations
(a) The General Partners shall manage the affairs of the
Partnership to the best of their ability, shall use their best
efforts to carry out the purpose of the Partnership, and shall
devote to the Partnership such time as may be necessary for the
proper performance of their duties and the business of the
Partnership. The General Partners shall promptly take all action
which may be necessary or appropriate for the proper development,
maintenance and operation of the Apartment Complex in accordance
with the provisions of this Agreement, the Project Documents and
applicable laws and regulations including, without limitation,
funding the Construction and Development Fee to the extent
Capital Contributions and Cash Flow are insufficient. The General
Partners are responsible for the management and operation of the
Partnership, including the oversight of the rent-up and
operational stages of the Apartment Complex.
(b) The General Partners shall use their best efforts to
cause the Partnership to generate Cash Flow for distribution to
the Partners at the maximum realizable level in view of (i) any
applicable Agency and other regulations, (ii) the Minimum Set-
Aside Test and (iii) the Rent Restriction Test, and, if
necessary, the General Partners shall also use their best efforts
to obtain approvals and implementation of appropriate adjustments
in the rental schedule of the Apartment Complex.
(c) The General Partners shall cause the Partnership to
obtain and keep in force, during the term of the Partnership,
comprehensive casualty insurance, including, but not limited to,
fire and other risks generally included under "extended coverage"
policies, workmen's compensation and public liability insurance
in favor of the Partnership (i) with such companies and in such
amounts as shall be satisfactory to the Lenders and any Agency,
or, if the Apartment Complex is no longer subject to Lender or
Agency regulation or requirements, as shall be customary for
apartment complexes similar to the Apartment Complex and (ii) in
amounts which shall be (A) no less than those amounts which are
customary in the area for apartment complexes similar to the
Apartment Complex, (B) no less than such amounts as may be
reasonably requested by the Investment Limited Partner and/or the
Special Limited Partner from time to time, and (C) in any event,
sufficient to prevent the Partnership from becoming a co-insurer
under any such policies. No deductibles on such policies may
exceed $1,000, without the prior written consent of the
Investment Limited Partner. The Partnership's fire and other
casualty insurance shall be in an amount at least equal to the
full replacement value of the Apartment Complex. The General
Partner shall cause the Partnership and all Partners to be named
as additional insured parties on a combined single limit bodily
injury and property damage liability insurance policy in the
amount of not less than $6,000,000 (of which up to $5,000,000 may
be provided under an umbrella policy). Through the Completion
Date, or such later date as may be required by the Construction
Lender or any Agency , the General Partners shall also cause the
Partnership to obtain and keep in force a builder's risk policy
in favor of the Partnership in an amount not less than the
greater of (i) the full replacement value of the Apartment
Complex (excluding the value of the underlying land, the site
utilities and the foundations) or (ii) such other amount as shall
be required by any Agency or the Construction Lender.
Throughout the term of the Partnership, the General Partners
shall provide copies of all such policies (or binders) to the
Investment Limited Partner promptly after their receipt thereof.
Upon the request of the Investment Limited Partner to the General
Partners, the General Partners shall cause the applicable insurer
to name the Investment Limited Partner as an "additional insured"
on each Partnership insurance policy.
(d) The obligations of the General Partners hereunder shall
be the joint and several obligations of each General Partner.
Except as otherwise provided in Sections 4.5(b) and 7.1, such
obligations shall survive any Withdrawal of a General Partner
from the Partnership.
(e)(1) The General Partners shall establish and maintain
reasonable reserves to provide for working capital needs,
improvements, replacements and any other contingencies of the
Partnership. At a minimum, the General Partners shall cause the
Partnership to annually deposit $9,600 from its Cash Flow into
replacement reserves. To the extent that Cash Flow (as
determined before deduction of this reserve deposit) for any year
shall be insufficient to make such deposit in full, the General
Partners shall fund such shortfall from their own funds as a
Subordinated Loan.
(f) Each General Partner shall be bound by the Project
Documents, and no additional General Partner shall be admitted if
he, she or it has not first agreed to be bound by this Agreement
(and assume the obligations of a General Partner hereunder) and
by the Project Documents to the same extent and under the same
terms as the other General Partners.
(g) The General Partners shall take all actions necessary to
ensure that the Investment Limited Partner receives the full
amount of the Projected Credit, including, without limitation,
the rental of apartments to Qualified Tenants and the filing of
annual certifications as may be required. In this regard, the
General Partners shall, inter alia, cause (i) the Partnership to
satisfy all requirements imposed from time to time under the Code
with respect to rental levels and occupancy by Qualified Tenants
by the close of the first year of the Credit Period so as to
permit the Partnership to be entitled to the Tax Credit
throughout the compliance period specified in the Code, (ii) all
dwelling units in the Apartment Complex to be leased for periods
of not less than six months to persons satisfying the Rent
Restriction Test, (iii) the Partnership to make all appropriate
Tax Credit elections in a timely fashion, and (iv) all rental
units in the Apartment Complex to be of equal quality with
comparable amenities available to low-income tenants on a
comparable basis without separate fees.
(h) On or before the Admission Date, the General Partners
shall provide to the Investment Limited Partner either (i) an
appraisal of the Apartment Complex prepared by a competent
independent appraiser or (ii) completed FmHA 1924-13 (estimate
and certificate of actual cost) and 1930-7 (statement of budget,
income and expense) or HUD project cost and budget analysis on
Form 2264, or any successor FmHA or HUD form, any comparable form
of a state or other governmental agency, including any applicable
Tax Credit allocation agency, setting forth estimates with
respect to construction and mortgage financing costs and initial
rental income and operating expense figures for the Apartment
Complex.
(i) The General Partners shall (i) not store (except in
compliance with all laws, ordinances, and regulations pertaining
thereto) or dispose of any Hazardous Material at the Apartment
Complex, or at or on any other Site or Vessel owned, occupied, or
operated either by any General Partner, any Affiliate of a
General Partner, or any Person for whose conduct any General
Partner is or was responsible; (ii) neither directly nor
indirectly transport or arrange for the transport of any
Hazardous Material (except in compliance with all laws,
ordinances, and regulations pertaining thereto); (iii) provide
the Investment Limited Partner with written notice (x) upon any
General Partner's obtaining knowledge of any potential or known
release, or threat of release, of any Hazardous Material at or
from the Apartment Complex or any other Site or Vessel owned,
occupied, or operated by any General Partner, any Affiliate of a
General Partner or any Person for whose conduct any General
Partner is or was responsible or whose liability may result in a
lien on the Apartment Complex; (y) upon any General Partner's
receipt of any notice to such effect from any Federal, state, or
other governmental authority; and (z) upon any General Partner's
obtaining knowledge of any incurrence of any expense or loss by
any such governmental authority in connection with the
assessment, containment, or removal of any Hazardous Material for
which expense or loss any General Partner may be liable or for
which expense or loss a lien may be imposed on the Apartment
Complex.
6.6 Representations and Warranties
The General Partners represent and warrant to the Investment
Limited Partner and the Special Limited Partner as follows:
(1) The Partnership is a duly organized limited partnership
validly existing and in good standing under the laws of the State
and has complied with all filing requirements necessary for its
existence and to preserve the limited liability of the Investment
Limited Partner and the Special Limited Partner.
(2) No event or proceeding has occurred or is pending or
threatened which would (a) materially adversely affect the
Partnership or its properties, or (b) materially adversely affect
the ability of the General Partners or any of their Affiliates to
perform their respective obligations hereunder or under any other
agreement with respect to the Apartment Complex, other than legal
proceedings which have been bonded against without recourse to
Partnership assets in such manner as to stay the effect of the
proceedings or otherwise have been adequately provided for. This
subparagraph shall be deemed to include, without limitation, the
following: (x) legal actions or proceedings before any court,
commission, administrative body or other governmental authority
having jurisdiction over the zoning applicable to the Apartment
Complex; (y) labor disputes; and (z) acts of any governmental
authority.
(3) No default (or event which, with the giving of notice or
the passage of time or both, would constitute a default) has
occurred and is continuing under this Agreement or under any
material provision of the Project Documents, and the same are in
full force and effect.
(4) No Partner or Related Person bears the economic risk of
loss with respect to the Permanent Mortgage. No General Partner
has, either on its own behalf or on behalf of the Partnership,
incurred any financial responsibility with respect to the
Partnership prior to the Admission Date, other than as disclosed
in writing to the Investment Limited Partner prior to the
Admission Date.
(5) The Apartment Complex will be completed in a timely
manner in conformity with the Project Documents. There is no
violation by the Partnership or the General Partners of any
zoning, environmental or similar regulation applicable to the
Apartment Complex which could have a material adverse effect
thereon, and the Partnership has complied with all applicable
municipal and other laws, ordinances and regulations relating to
such construction and use of the Apartment Complex. All
appropriate public utilities, including, but not limited to,
water, electricity, gas (if called for in the plans and
specifications), and sanitary and storm sewers, are or will be
available and operating properly for each unit in the Apartment
Complex at the time of the first occupancy of such unit.
(6) The Partnership owns good and marketable fee simple
title to the Apartment Complex, subject to no material liens,
charges or encumbrances other than those which (a) are both
permitted by the Project Documents and are noted or excepted in
the title insurance policy number delivered to the Partnership
pursuant to section 5.1(b) to the Partnership, as endorsed
through and (b) do not materially interfere with use of the
Apartment Complex (or any part thereof) for its intended purpose
or have a material adverse effect on the value of the Apartment
Complex.
(7) The execution and delivery of all instruments and the
performance of all acts heretofore or hereafter made or taken
pertaining to the Partnership or the Apartment Complex by each
Affiliate of a General Partner which is a corporation have been
or will be duly authorized by all necessary corporate or other
action, and the consummation of any such transactions with or on
behalf of the Partnership will not constitute a breach or
violation of, or a default under, the charter or by-laws of such
Affiliate or any agreement by which such Affiliate or any of its
properties is bound, nor constitute a violation of any law,
administrative regulation or court decree.
(8) Any General Partner which is a corporation (a
"Corporation") or a limited liability company ("LLC") has been
duly organized, is validly existing and in good standing under
the laws of its state of incorporation and has all requisite
corporate power to be a General Partner and to perform its duties
and obligations as contemplated by this Agreement and the Project
Documents. Neither the execution and delivery by any Corporation
of this Agreement nor the performance of any of the actions of
any Corporation contemplated hereby has constituted or will
constitute a violation of (a) the articles of organization; by-
laws operating agreement or other controlling document of such
Corporation or LLC, (b) any agreement by which such Corporation
is bound or to which any of its property or assets is subject, or
(c) any law, administrative regulation or court decree.
(9) No Event of Bankruptcy has occurred with respect to any
General Partner.
(10) All accounts of the Partnership required to be
maintained under the terms of the Project Documents, including,
but not necessarily limited to, any account for replacement
reserves, are currently funded to the levels required by the
Lenders and/or any Agency .
(11) If the only General Partner(s) are one or more
corporations, then the General Partner(s) have a net worth which
satisfies the 89-12 Requirements.
(12) All payments and expenses required to be made or
incurred in order to complete construction of the Apartment
Complex in conformity with the Project Documents, to fund any
reserves hereunder or under any other Project Document required
to be funded at or prior to the later of the Admission Date or
Permanent Mortgage Commencement, to satisfy all requirements
under the Project Documents and/or which form the basis for
determining the principal sum of the Permanent Mortgage and to
pay the Construction and Development Fee have been or will be
paid or provided for utilizing only (a) the funds available from
the Construction Mortgage, (b) the Capital Contribution of the
Investment Limited Partner, (c) the Capital Contributions of the
General Partners in the amounts set forth on Schedule A as of the
Admission Date, (d) the available net rental income, if any,
earned by the Partnership prior to Permanent Mortgage
Commencement (to the extent that it is permitted to be used for
such purposes by the Lenders and/or any Agency ), (e) any
insurance proceeds and (f) the funds furnished by the General
Partners pursuant to Sections 6.5(a) and 6.11(a).
(13) The amount of Tax Credit which is expected to be
allocated by the Partnership to the Investment Limited Partner is
$142,093 for 1998; $176,391 per annum for the years 1999 through
2007 (inclusive); and $34,298 for 2008.
(14) The Apartment Complex is being developed in a manner
which satisfies and shall continue to satisfy, all restrictions,
including tenant income and rent restrictions, applicable to
projects generating Tax Credits.
(15) The General Partners have provided the Investment
Limited Partner with a complete copy of "Phase I" hazardous waste
site assessment report for the Apartment Complex. No General
Partner, Affiliate of a General Partner or Person for whose
conduct any General Partner is or was responsible has ever: (i)
owned, occupied, or operated a Site or Vessel on which any
Hazardous Material was or is stored, transported, or disposed of,
except if such storage, transport or disposition was and is at
all times in compliance with all laws, ordinances, and
regulations pertaining thereto; (ii) directly or indirectly
transported, or arranged for transport, of any Hazardous Material
(except if such transport was or is at all times in compliance
with all laws, ordinances and regulations pertaining thereto);
(iii) caused or was legally responsible for any release or threat
of release of any Hazardous Material; (iv) received notification
from any Federal, state or other governmental authority of (x)
any potential, known, or threat of release of any Hazardous
Material from the Apartment Complex or any other Site or Vessel
owned, occupied, or operated by any General Partner, by any
Affiliate of a General Partner, or any Person for whose conduct
any General Partner is or was responsible or whose liability may
result in a lien on the Apartment Complex; or (y) the incurrence
of any expense or loss by any such governmental authority or by
any other Person in connection with the assessment, containment,
or removal of any release or threat of release of any Hazardous
Material from the Apartment Complex or any such Site or Vessel.
(16) To the best of the General Partners' knowledge, no
Hazardous Material was ever or is now stored on, transported, or
disposed of on the land comprising the Apartment Complex, except
to the extent any such storage, transport or disposition was at
all times in compliance with all laws, ordinances, and
regulations pertaining thereto.
(17) The General Partners have fulfilled and will continue
to fulfill all of their duties and obligations under Section 6.5.
(18) As of the due date of the First Installment and at all
times thereafter, the Construction Mortgage Closing has occurred,
and construction of the Apartment Complex is being completed (and
as of the Completion Date will have been completed) in conformity
with the requirements hereof and of the Project Documents.
(19) As of the Admission Date, the General Partner shall
have made Capital Contributions to the Partnership in the amount
of $100.
(20) As of December 31, 1995, the Partnership had owned land
or depreciable property constituting part of the Apartment
Complex and had incurred capitalizable costs with respect to the
Apartment Complex of at least ten percent (10%) of the
Partnership's reasonably expected basis as of December 31, 1997
so that each building in the Apartment Complex constitutes a
"qualified building" for purposes of Section 42 (h)(1)(E)(ii) of
the code.
6.7 Liability on the Permanent Mortgage
Neither any General Partner nor any Related Person shall at
any time bear the Economic Risk of Loss for the payment of any
portion of any Mortgage, and the General Partners shall not
permit any other Partner or any Related Person to bear the
Economic Risk of Loss for the payment of any portion of any
Mortgage, except as may be expressly permitted with respect to
the Construction Mortgage pursuant to Article III.
6.8 Indemnification of the General Partners
(a) No General Partner nor any Affiliate thereof shall have
liability to the Partnership or to any Limited Partner for any
loss suffered by the Partnership which arises out of any action
or inaction of any General Partner or Affiliate thereof if such
General Partner or Affiliate thereof in good faith determined
that such course of conduct was in the best interest of the
Partnership and such course of conduct did not constitute
negligence or misconduct of such General Partner or Affiliate
thereof.
(b) A General Partner or any Affiliate thereof may be
indemnified by the Partnership against losses, judgments,
liabilities, expenses and amounts paid in settlement of any
claims sustained in connection with the Partnership, provided
that all of the following conditions are met: (i) such General
Partner has determined, in good faith, that the course of conduct
which caused the loss, judgment, liability, expense or amount
paid in settlement was in the best interests of the Partnership;
and (ii) such loss, judgment, liability, expense or amount paid
in settlement was not the result of negligence or misconduct on
the part of the General Partner or Affiliate thereof; and (iii)
such indemnification or agreement to hold harmless is recoverable
only out of the assets of the Partnership, and not from the
Limited Partners.
(c) Notwithstanding the above, no General Partner or any
Affiliate thereof performing services for the Partnership or any
broker-dealer shall be indemnified for any losses, liabilities or
expenses arising from or out of an alleged violation of Federal
or state securities laws unless (i) there has been a successful
adjudication on the merits of each count involving securities
laws violations as to the particular indemnitee and, the court
approves the indemnification of such litigation costs, (ii) such
claims have been dismissed with prejudice on the merits by a
court of competent jurisdiction as to the particular indemnitee
and, the court approves the indemnification of such litigation
costs or (iii) a court of competent jurisdiction approves a
settlement of the claims against a particular indemnitee and the
court finds that indemnification of the settlement and related
costs should be made. In any claim for indemnification for
Federal or state securities law violations, the party seeking
indemnification shall, prior to seeking court approval for such
indemnification, place before the court the positions of the
Securities and Exchange Commission, the Massachusetts Securities
Division, the North Dakota Securities Division, and any other
applicable state securities administrator with respect to the
issue of indemnification for securities law violations.
(d) The Partnership shall not incur the cost of the portion
of any insurance, other than public liability insurance, which
insures any party against any liability as to which such party is
herein prohibited from being indemnified.
(e) The Partnership may indemnify Affiliates of the General
Partner under this Section 6.8 only if the loss involves activity
in which such Affiliates acted in the capacity of a General
Partner.
(f) For purposes of this Section 6.8 only, the term
"Affiliate" shall mean any Person performing services on behalf
of the Partnership who (i) directly or indirectly controls, is
controlled by or is under common control with a General Partner;
(ii) owns or controls ten percent (10%) or more of the
outstanding voting securities of a General Partner; (iii) is an
officer, director, partner or trustee of a General Partner; or
(iv) if a General Partner is an officer, director, partner or
trustee, is any company for which such General Partner acts in
any such capacity.
6.9 Indemnification of the Partnership and the Limited Partners
(a) The General Partners will indemnify and hold the
Partnership and the Limited Partners harmless from and against
any and all losses, damages and liabilities which the Partnership
or any Limited Partner may incur by reason of the (a) past,
present or future actions or omissions of the General Partner or
any of their Affiliates, except acts undertaken in their capacity
as General Partner of the Partnership or (b) any liabilities to
which either the Partnership or the Apartment Complex is subject;
provided, however, that the foregoing indemnification shall not
apply to (i) any Mortgage or (ii) necessary contractual
obligations incurred pursuant to Agency or Lender requirements
in connection with the operation of the Apartment Complex in the
ordinary course of business.
(b) Notwithstanding the foregoing, no General Partner shall
be liable to a Limited Partner or the Partnership for any act or
omission for which the Partnership is required to indemnify such
General Partner under Section 6.8.
(c) The General Partners shall indemnify, defend, and hold
the Investment Limited Partner harmless from and against any
claim brought or threatened against the Investment Limited
Partner or loss (as well as from any and all attorneys' fees and
expenses incurred in connection with any such claim or loss) on
account of the presence of any Hazardous Material at the
Apartment Complex. Any claim or loss described in the immediately
preceding sentence may be defended, compromised, settled, or
pursued by the Investment Limited Partner with counsel of the
Investment Limited Partners' selection, but at the expense of the
General Partners. Notwithstanding anything else set forth herein,
this indemnification shall survive the withdrawal of any General
Partner and/or the termination of this Agreement.
6.10 Operating Deficits
Subject to the prior written consent of any Agency (if such
consent shall be required under applicable Agency regulations),
the General Partners shall be obligated from the later to occur
of (i) Permanent Mortgage Commencement or (ii) the Admission Date
to advance funds to meet operating expenses, debt service and
the Replacement Reserve Fund of the Partnership which exceed
operating income available for the payment thereof. For Purposes
of this Section 6.10, "operating expenses" shall expressly
include the Asset Management Fee. In the event that the General
Partners shall fail to make any such advance as aforesaid, the
Partnership shall utilize amounts (the "Applied Fees") otherwise
payable to the General Partners or Affiliates thereof under
Section 6.12 and/or Article X to meet the obligations of the
General Partners pursuant to this Section 6.10. Such utilization
of Applied Fees shall also constitute payment and satisfaction of
the corresponding amounts payable to the General Partners or
Affiliates thereof under Section 6.12 and/or Article X, with the
proceeds thereof being applied to such obligations, and the
obligation of the Partnership to make such installment payments
to the General Partners or the Affiliates thereof pursuant to
Section 6.12 and/or Article X being deemed satisfied to the
extent thereof. For the purpose of this Section 6.10, all
expenses shall be paid on a sixty (60)-day current basis.
Moreover, the General Partners may in their sole discretion at
any time advance funds to the Partnership to pay operating
expenses and/or debt service of the Partnership in order to
facilitate the Partnership's compliance with the Rent Restriction
Test. All advances pursuant to this Section 6.10 (including any
Applied Fees) shall be Subordinated Loans repayable without
interest in accordance with the provisions of Article X. The
form and provisions of all Subordinated Loans shall conform to
applicable rules and regulations.
6.11 Obligation to Complete the Construction and
Rehabilitation of the Apartment Complex
(a) The General Partners shall complete the construction and
rehabilitation of the Apartment Complex substantially in
accordance with the plans and specifications approved by the
Lenders and/or any Agency and all requirements necessary to
obtain the required certificates of occupancy for dwelling units,
or cause the same to be completed, in a good and workmanlike
manner, free and clear of all mechanics', materialmen's or
similar liens, and shall equip the Apartment Complex or cause the
same to be equipped with all necessary and appropriate fixtures,
equipment and articles of personal property, including
refrigerators and ranges, and shall cause all necessary
certificates of occupancy for all apartment units in the
Apartment Complex to be obtained, all in accordance with the
Project Documents. If the proceeds of the Construction and
Permanent Mortgages, the net rental income, if any, of the
Apartment Complex generated prior to the later of Permanent
Mortgage Commencement or the Admission Date and which is
permitted by the Lenders and/or any Agency to be utilized for
any of the purposes hereinafter set forth, the Capital
Contribution of the Investment Limited Partner, the Capital
Contributions of the General Partners in the amounts set forth on
Schedule A as of the Admission Date, and any insurance proceeds
arising out of casualties prior to the later of Permanent
Mortgage Commencement or the Admission Date as available from
time to time are insufficient to (i) acquire and complete the
construction of the Apartment Complex and satisfy all other
obligations, all as provided in the first sentence of this
Section 6.11(a), (ii) make the special distributions to the
General Partners described in Section 10.2(c), (iii) pay the
Construction and Development Fee, (iv) arrive at Permanent
Mortgage Commencement in conformity with the Project Documents,
(v) discharge all Partnership liabilities and obligations arising
out of any casualty giving rise to any such insurance proceeds,
and (vi) provide for all other payments and expenses required to
be made or incurred through the later of Permanent Mortgage
Commencement or the Admission Date, including the funding of any
reserves required hereunder or under any other Project Document
and the repayment in full of all obligations under the
Construction Mortgage, the General Partners shall be responsible
for and obligated to pay such deficiencies and shall, to the
extent permitted under the Project Documents and any applicable
regulations or requirements of the Lenders and/or any Agency, be
reimbursed at or prior to the later of Permanent Mortgage
Commencement or the Admission Date only out of the proceeds
designated in this sentence available from time to time after
payment of all costs described in this sentence. Any amounts not
reimbursed through the later of Permanent Mortgage Commencement
or Admission Date only out of the proceeds of the Capital
Contribution of the Investment Limited Partner as provided in
Section 5.1 shall not be reimbursable or otherwise change the
Interest of any Person in the Partnership but shall be borne by
the General Partners; provided, however, that, notwithstanding
the foregoing, to the extent any such amounts represent items
which are properly included in the Partnership's Qualified Basis
for purposes of Section 42 of the Code and result in an increase
in the amount of Tax Credit allocated and available to the
Partnership over and above the amount of Tax Credit required in
order to achieve State Designation ("Includable Items"), the
General Partners shall make an additional Capital Contribution in
the amount of the Includable Items and the Partnership shall
utilize the proceeds of such additional Capital Contribution to
pay the Includable Items. In the event that the General Partners
shall fail to fund any such deficiency as required by this
Section 6.11, an amount not in excess of the next installment of
the Construction and Development Fee due to the General Partners
or any of their Affiliates under Section 6.12 or any other
provision hereof shall be applied by the Partnership to meet such
obligation of the General Partners, and, to the extent there may
still be a deficiency, any amounts otherwise payable as the
Annual Partnership Management Fee or distributable to the General
Partners pursuant to Article X shall be so applied. Any such
application of funds as described in the immediately preceding
sentence shall constitute a payment of the amount of the Fee or
such other item which such funds had been earmarked to pay, and
the obligation of the General Partners to advance such amount
under this Section 6.11 shall be satisfied to the extent of such
application.
6.12 Certain Payments to the General Partners and Others
(a) The Partnership shall pay to the General Partners, or
their designee, a non-cumulative fee (the "Annual Partnership
Management Fee") commencing in 1998 for services in connection
with the administration of the day to day business of the
Partnership in an annual amount of $3,000. The Annual
Partnership Management Fee for each fiscal year of the
Partnership shall be payable from Cash Flow in the manner and
priority set forth in Section 10.2(a) to the extent Cash Flow is
available therefor for such year.
(b) In consideration of their consultation, advice and other
services in connection with the construction and development of
the Apartment Complex and as consideration for the assignment
described in Section 6.14, the Partnership shall pay to the
General Partners (or their designee) a construction and
development fee (the "Development Fee") in the principal amount
of $65,005 which fee shall be payable $45,005 from the proceeds
of the Third Installment and $20,000 from the proceeds of the
Fourth Installment. Any portion of the Construction and
Development Fee which shall not have been paid as of the date
which is six months after it shall have been earned shall accrue
interest at the Applicable Federal Rate in effect at the time
earned from the date earned through the date of payment; any such
interest shall be payable in accordance with the provisions of
Article X.
(c) The Partnership shall pay to BCCLP or an Affiliate
thereof a fee (the "Asset Management Fee ") commencing in 1998
for its services in connection with the Partnership's accounting
matters relating to the Investment Limited Partner and assisting
with the preparation of tax returns and the reports required by
Section 12.7 in the annual amount of $3,000. The Asset
Management Fee shall be payable from Cash Flow in the manner and
priority set forth in Section 10.2(a); provided, however, that if
in any fiscal year commencing with 1998, Cash Flow is insufficient
to pay the full amount of the Asset Management Fee, the General
Partner shall be obligated to make Subordinated Loans to the
Partnership to cover $3,000 of the Asset Management Fee in
any such year.
6.13 Delegation of General Partner Authority
If there shall be more than one General Partner serving
hereunder, each General Partner may from time to time, by an
instrument in writing, delegate all or any of his powers or
duties hereunder to another General Partner or General Partners.
Every contract, deed, mortgage, lease and other instrument
executed by any General Partner shall be conclusive evidence in
favor of every Person relying thereon or claiming thereunder that
at the time of the delivery thereof (a) the Partnership was in
existence, (b) this Agreement had not been amended in any manner
so as to restrict the delegation of authority among General
Partners (except as shown in certificates or other instruments
duly filed in the Filing Office) and (c) the execution and
delivery of such instrument was duly authorized by the General
Partners. Any Person may always rely on a certificate addressed
to him and signed by any General Partner hereunder:
(1) As to who are the General Partners or Limited Partners
hereunder;
(2) As to the existence or nonexistence of any fact which
constitutes a condition precedent to acts by the General Partners
or in any other manner germane to the affairs of the Partnership;
(3) As to who is authorized to execute and deliver any
instrument or document of the Partnership;
(4) As to the authenticity of any copy of this Agreement,
the Certificate, and amendments thereto; or
(5) As to any act or failure to act by the Partnership or as
to any other matter whatsoever involving the Partnership or any
Partner.
6.14 Assignment to Partnership
The General Partners hereby transfer and assign to the
Partnership all of their right, title, and interest in and to the
Apartment Complex and in and to all of the Project Documents,
including, but not limited to, the following: (i) all contracts
with architects, supervising architects, engineers and
contractors with respect to the development of the Apartment
Complex; (ii) all plans, specifications and working drawings
heretofore prepared or obtained in connection with the Apartment
Complex; (iii) all governmental commitments and approvals
obtained, and applications therefor, including, but not limited
to, those relating to planning, zoning, building permits and Tax
Credit; (iv) any and all commitments with respect to any
Mortgage(s); (v) any and all contracts or rights with respect to
any agreements with any Lender; and (vi) any other work product
related to the Apartment Complex and/or the Partnership.
ARTICLE VII
Withdrawal of a General Partner; New General Partners
7.1 Withdrawal
(a) No General Partner shall Withdraw from the Partnership
(other than by reason of death or adjudication of incompetence or
insanity) or sell, assign or encumber its Interest without the
Consent of the Investment Limited Partner and all the other
General Partners, except that if the Special Limited Partner
becomes a General Partner pursuant to Section 4.5(b), it shall
not require the consent of any other General Partner to transfer
all or any portion of its interest as a General Partner, other
than as may be required under the Uniform Act. In the event of
any Withdrawal by a General Partner in violation of this Section
7.1, such General Partner, in addition to being subject to any
and all other legal remedies which may be pursued by the
Partners, shall forfeit to the Special Limited Partner, such
General Partner's Interest and all unpaid fees from the
Partnership and shall remain liable for all of the Withdrawing
General Partner's obligations under this Agreement; provided,
however, that the Withdrawing General Partner's liability
hereunder shall be limited to obligations arising prior to his
Withdrawal, and shall include no obligations arising after such
Withdrawal. In addition, upon such Withdrawal and transfer, the
Special Limited Partner or its designee shall automatically
become a General Partner without further action by the
Withdrawing General Partner or any other Partner, and the
Investment Limited Partner hereby consents to such transfer and
to the admission of the Special Limited Partner or its designee
as a General Partner in such a situation. Such transfer shall
occur automatically upon such Withdrawal without further action
by such Withdrawing General Partner.
(b) If at any time the only General Partners shall be one or
more corporations (or partnerships with corporations as sole
general partners), they shall be obligated to have a net worth
which satisfies the 89-12 Requirements. If the General Partners
shall at any time fail to meet the requirements of this Section
7.1(b), then they shall be deemed to have withdrawn from the
Partnership in violation of the provisions of this Section 7.1
and shall be subject to the provisions of Section 7.1(a).
Notwithstanding the foregoing, the provisions of this Section
7.1(b) shall not apply to the Special Limited Partner in the
event it becomes the sole General Partner.
7.2 Obligation to Continue
Upon the Withdrawal of a General Partner, the remaining
General Partners shall have the right and obligation to continue
the business of the Partnership employing its assets and name,
all as contemplated by the Uniform Act. Within thirty (30) days
after they obtain knowledge of the Withdrawal of a General
Partner, the remaining General Partners shall notify the
Investment Limited Partner or its designee of such Withdrawal.
7.3 Withdrawal of All General Partners
If, following the Withdrawal of a General Partner, there is
no remaining General Partner, the Investment Limited Partner and
the Special Limited Partner may elect to reconstitute the
Partnership and continue the business of the Partnership for the
balance of the term specified in Section 2.4 by selecting a
successor General Partner. If the Investment Limited Partner and
the Special Limited Partner elect to reconstitute the Partnership
pursuant to this Section 7.3 and admit the designated successor
General Partner, the relationship among the then Partners shall
be governed by this Agreement.
7.4 Interest of General Partner After Permitted Withdrawal
In the event of the Withdrawal of a General Partner not in
violation of Section 7.1 and except as otherwise provided in
Section 4.5(b), the Withdrawing General Partner hereby covenants
and agrees to transfer to the remaining General Partners or to a
successor General Partner selected in accordance with Section
7.3, as the case may be, such portion of the Withdrawing General
Partner's Interest as such remaining or successor General
Partners may designate, such transfer to be made in consideration
of the payment by the transferee of either the agreed value of
such Interest or, if such value is not agreed to, the fair market
value of such Interest as determined by a committee of three
qualified real estate appraisers, one selected by the Withdrawing
General Partner, one selected by the transferee and a third
selected by the other two. The portion of the Withdrawing
General Partner's Interest designated to be transferred in
accordance with the provisions of this Section 7.4 shall be
sufficient to ensure the continued treatment of the Partnership
as a partnership under the Code and as a limited partnership
under the Uniform Act, and, for the purposes of Article X, shall
be deemed to be effective as of the date of Withdrawal, but the
Partnership shall not make any distributions to the designated
transferee until the transfer shall have been made. Any holder
of any portion of the Interest of a Withdrawing General Partner
which is not designated to be transferred to the remaining or
successor General Partners pursuant to the provisions of this
Section 7.4 shall become an Additional Limited Partner but (i)
with the same share of the profits, losses, tax credits, Cash
Flow and other distributions to which the holder of such Interest
was entitled when held as a General Partner Interest, and (ii)
shall not participate in the votes or Consents of the Investment
Limited Partner hereunder. The admission of any successor or
additional General Partner shall be subject to the consent of the
Lenders and any Agency (if required) and the Consent of the
Investment Limited Partner.
7.5 Admission of Additional General Partner(s) under
Certain Circumstances
In the event each of the General Partners is a corporation
and the General Partners at any time, or from time to time, fail
to have a net worth which satisfies the 89-12 Requirements, the
Special Limited Partner or its designee(s) shall be admitted (and
each hereby agrees to be admitted], automatically and without
further action by them or any Partner, as additional General
Partner(s), notwithstanding any other provision of this
Agreement. The General Partners hereby agree to take all action
necessary to implement this Section 7.5. Further, the General
Partners agree in such event to give prompt written notice
thereof to each Lender and Agency. If any Lender or Agency
rejects the admission of any additional General Partner so
admitted as a General Partner, then such additional General
Partner shall withdraw as a General Partner promptly after an
additional General Partner acceptable to each Lender and Agency
is admitted to the Partnership. Simultaneously with such
admission, each of the previously admitted General Partners shall
be deemed to have assigned proportionally to the additional
General Partner(s), automatically and without further action,
such portion of its General Partner Interest so that the
additional General Partner shall receive not less than a one
percent (1%) interest (or such greater percentage as may be
required either (i) in the opinion of the Tax Accountants, to
assure the partnership status of the Partnership for Federal
income tax purposes or (ii) by any Agency in the profits, losses,
tax credits and distributions of the Partnership in consideration
of $1.00 and any other consideration which may be agreed upon.
An additional General Partner so admitted shall automatically
become the Managing General Partner and be irrevocably delegated
all of the power and authority of all of the General Partners
pursuant to Section 6.13. Each such additional General Partner
shall remain a General Partner until a Lender or Agency shall
object thereto in writing or until such time as, in the opinion
of the Tax Accountants, the Partnership would continue to be
treated as a partnership for Federal income tax purposes
notwithstanding their Withdrawal. At such time, each such
additional General Partner may, at its option, then Withdraw
without the approval of the Limited Partners upon reassignment of
its entire Interest to the remaining General Partners. Each
partner hereby grants to the Special Limited Partner a special
power of attorney, irrevocable to the extent permitted by law and
coupled with an interest, to amend the Certificate and this
Agreement and to do anything else which, in the view of the
Special Limited Partner, may be necessary or appropriate to
accomplish the purposes of this Section 7.5 or to manage the
business of the Partnership. The admission of an additional
General Partner shall not relieve any other General Partner of
any of its obligations hereunder, and each other General Partner
shall fully indemnify and hold harmless the additional General
Partner from and against any and all losses, judgments
liabilities, expenses and amounts paid in settlement of any
claims sustained in connection with its capacity as a General
Partner.
ARTICLE VIII
Transferability of Limited Partner Interests
8.1 Assignments
(a) Except by operation of law (including the laws of
descent and distribution) or Section 8.1(b), no Limited Partner
may assign all or any part of its Interest without the written
consent of the General Partners, the giving or withholding of
which is exclusively within their discretion.
(b) A Limited Partner, without the consent of the General
Partners, may assign to any Person all or any portion of the
economic benefits of the ownership of its Interest; provided,
however, that such assignment shall not be binding on the
Partnership until there shall have been filed with the
Partnership by registered mail certified copies of an executed
and acknowledged assignment and the written acceptance by the
assignee of all the terms and provisions of this Agreement; if
such assignment and acceptance are not so filed, the Partnership
need not recognize such assignment for any purpose. An assignee
of a Limited Partner who does not become a Substituted Limited
Partner shall have, and shall only have, the right to receive the
share of allocations and distributions of the Partnership to
which the assigning Limited Partner would have been entitled with
respect to the Interest (or portion thereof) so assigned if no
such assignment had been made by such Limited Partner. Any
assigning Limited Partner whose permitted assignee becomes a
Substituted Limited Partner shall thereupon cease to be a Limited
Partner and shall no longer have any of the rights or privileges
of a Limited Partner. Where the assignee does not become a
Substituted Limited Partner, the Partnership shall recognize such
assignment not later than the last day of the calendar month
following receipt of notice of assignment and all documentation
required in connection therewith.
(c) Every assignee of a Limited Partner Interest (or any
portion thereof) who desires to make a further assignment of its
Interest shall be subject to all the provisions of this Article
VIII.
8.2 Substituted Limited Partner
No Limited Partner shall have the right to substitute an
assignee as Limited Partner in its place. Subject to Section
8.3, the General Partners may, however, in their sole discretion,
permit an assignee to become a Substituted Limited Partner. The
consent of the General Partners to an assignment of a Limited
Partner Interest under Section 8.1 shall not, in and of itself,
constitute permission under this Section 8.2.
Any Substituted Limited Partner shall execute such
instrument or instruments as shall be required by the General
Partners to signify the agreement of such Substituted Limited
Partner to be bound by all the provisions of this Agreement and
shall pay the Partnership's reasonable legal fees and filing
costs in connection with its substitution as a Limited Partner.
8.3 Restrictions
(a) No Disposition may be made if such Disposition would
violate Section 13.1.
(b) In no event shall all or any part of a Limited Partner
Interest be Disposed of to a minor (other than to a descendant by
reason of death) or to an incompetent.
(c) The General Partners may, in addition to any other
requirement they may impose, require as a condition of any
Disposition that the transferor (i) assume all costs incurred by
the Partnership in connection therewith and (ii) furnish the
Partnership and the other Partners with an opinion of counsel
satisfactory to counsel to the Partnership that such Disposition
complies with applicable Federal and state securities laws.
(d) Any sale, exchange, transfer or other Disposition in
contravention of any of the provisions of this Section 8.3 shall
be void and ineffectual and shall not bind or be recognized by
the Partnership.
ARTICLE IX
Borrowings
9.1 Borrowings
All Partnership borrowings shall be subject to the terms of
this Agreement, including, but not limited to, the restrictions
of Section 6.2, and may be made from any source, including
Partners and their Affiliates. If any Partner shall lend any
monies to the Partnership, the amount of any such loan shall not
be an increase of such Partner's Capital Contribution. If any
Partner shall so lend monies, such loans shall be an obligation
of the Partnership and (except for Subordinated Loans) shall be
repayable to such Partner on the same basis and with the same
rate of interest as would be applicable to a comparable loan to
the Partnership from a third party.
ARTICLE X
Profits, Losses, Tax Credits, Distributions
and Capital Accounts
10.1 Profits, Losses and Tax Credits
(a) Subject to Section 10.1(c) and Section 10.4, for each
Partnership fiscal year or portion thereof, all profits, tax-
exempt income, losses, non-deductible non-capitalizable
expenditures, and tax credits incurred or accrued on or after the
Commencement Date, other than those arising from a Capital
Transaction, shall be allocated 99.99% to the Investment Limited
Partner and .01% to the General Partners.
(b) Except as otherwise specifically provided in this
Article, all profits and losses arising from a Capital
Transaction shall be allocated to the Partners as follows:
As to profits:
First, that portion of profits (including any profits
treated as ordinary income for Federal income tax purposes) shall
be allocated to the Partners who have negative Capital Account
balances in proportion to the amounts of such balances, provided
that no profits shall be allocated to a Partner under this Clause
First to increase any such Partner's Capital Account above zero;
Second, profits in excess of the amounts allocated under
Clause First above shall be allocated to the General Partners in
an amount equal to the amount of cash distributed or available to
be distributed to them pursuant to Clause Second of Section
10.2(b) as to the particular Capital Transaction;
Third, profits in excess of the amounts allocated under
Clauses First and Second above shall be allocated to the
Investment Limited Partner in an amount equal to the amount of
cash required to pay to the Investment Limited Partner the full
amount (including interest) of the Credit Recovery Loans;
Fourth, profits in excess of the amounts allocated under
Clauses First, Second and Third above shall be allocated (i) to
the Investment Limited Partner in an amount equal to the sum of
(a) its Invested Amount plus (b) the full amount (including
interest) of any Credit Recovery Loans and (ii) to each other
Limited Partner in an amount equal to the amount of its
respective Invested Amount, reduced (but not below zero) in the
case of each Limited Partner (whether under clause (i) or clause
(ii)) by the sum of (A) the total amount of all prior cash made
to such Limited Partner pursuant to Section 10.2(b), Clause Sixth
plus (B) the positive balance in the Capital Account of such
Limited Partner prior to the allocation made pursuant to this
Clause Fourth;
Fifth, profits in excess of the amounts allocated under
Clauses First, Second, Third and Fourth above shall be allocated
to each General Partner in the amount of its respective paid-in
Capital Contribution, reduced (but not below zero) by the sum of
(i) the total amount of distributions previously made to it
pursuant to Section 10.2(b), Clause Eighth to credit amounts
distributed under Clause Second of Section 10.2(b) against
amounts distributable under Clause Eighth of Section 10.2(b) (and
not including the amounts so credited) plus (ii) the positive
balance in such General Partner's respective Capital Accounts
prior to the allocations made pursuant to this Clause Fifth; and
Sixth, profits in excess of the amounts allocated under
Clauses First, Second, Third, Fourth, and Fifth above shall be
allocated to the Partners in the same percentages as cash is
distributed under Clause Ninth of Section 10.2(b) to credit
amounts distributed under Clause Second of Section 10.2(b)
against amounts distributable under said Clause Ninth (and not
including the amounts so credited.)
As to losses:
First, an amount of losses shall be allocated to the
Partners to the extent and in such proportions as shall be
necessary such that, after giving effect thereto, the respective
balances in all Partners' Capital Accounts shall be in the ratio
of 99.99% for the Investment Limited Partner and .01% for the
General Partners;
Second, an amount of losses shall be allocated to the
Partners until the balance in each Partner's Capital Account
equals the amount of such Partner's Capital Contribution (after
the allocation under Clause First above);
Third, an amount of losses shall be allocated to the
Partners to the extent of and in proportion to such Partners'
Capital Account balances (after the allocations under Clauses
First and Second above); and
Fourth, any remaining amount of losses after the allocations
under Clauses First, Second and Third above shall be allocated to
the Partners in accordance with the manner in which they bear the
Economic Risk of Loss; provided, however, that in the event that
no Partner bears an Economic Risk of Loss, then any remaining
losses shall be allocated 99.99% to the Investment Limited
Partner and .01% to the General Partners.
(c) Notwithstanding the foregoing provisions of Sections
10.1(a) and 10.1(b), in no event shall any losses be allocated to
the Investment Limited Partner or the Special Limited Partner if
an to the extent that such allocation would cause, as of the end
of the Partnership taxable year, the negative balance in the
Investment Limited Partner's Capital Account to exceed such
Partner's share of Partnership Minimum Gain plus such Partner's
share, if any of Partner Non-Recourse Debt Minimum Gain. Any
losses which are not allocated to a Partner by virtue of the
application of this Section 10.1(c) shall be allocated to the
General Partners. For the purposes of this Section 10.1(c), a
Partner's Capital Account shall be treated as reduced by
Qualified Income Offset Items.
10.2 Cash Distributions Prior to Dissolution
(a) Cash Flow
Subject to Agency and Lender approval (if required), Cash
Flow for each fiscal year or portion thereof of the Partnership
shall be applied as follows:
First, to the payment of the Asset Management Fee for such
year and for any previous year(s) as to which the Asset
Management Fee shall not yet have been paid in full;
Second, to the payment of any unpaid Construction and
Development Fee;
Third, to the repayment of any Subordinated Loans;
Fourth, to the payment of the Annual Partnership Management
Fee attributable to such year; and
Fifth, the balance thereof, if any, shall be distributed
annually, within seventy-five (75) days after the end of the
fiscal year, 20% to the Investment Limited Partner and 80% to the
General Partners.
(b) Distributions of other than Cash Flow
Prior to dissolution, if the General Partners shall
determine from time to time that cash is available for
distribution from a Capital Transaction, such cash shall be
applied or distributed as follows:
First, to the payment of all matured debts and liabilities
of the Partnership (including, but not limited to, all expenses
of the Partnership incident to the Capital Transaction),
excluding (i) debts and liabilities of the Partnership to
Partners or their Affiliates and (ii) all unpaid fees owing to
the General Partners or their Affiliates; and to the
establishment of any reserves which the General Partners and the
Auditors shall deem reasonably necessary for contingent,
unmatured or unforeseen liabilities or obligations of the
Partnership;
Second, if the Permanent Mortgage is in place at the time of
such Capital Transaction of if such Capital Transaction
constitutes a refinancing of the Permanent Mortgage, to the
General Partners in an aggregate amount equal to 5% of the
proceeds remaining after the payment of the items set forth in
Clause First of this Section 10.2(b);
Third, to the payment of the Asset Management Fee for such
year and for any previous year as to which the Asset Management
Fee has not been paid in full;
Fourth, to the payment to the Investment Limited Partner of
the full amount (including interest) of any Credit Recovery
Loans;
Fifth, to the repayment of any Subordinated Loans;
Sixth, to the repayment of any then-unpaid debts and
liabilities owed to Partners or Affiliates thereof by the
Partnership for Partnership obligations (exclusive of Credit
Recovery Loans and Subordinated Loans) to any of them, including,
but not limited to, accrued and unpaid Annual Partnership
Management Fee for the fiscal year of the Capital Transaction;
provided, however, that any debts or obligations to be repaid to
any Limited Partner or Affiliate thereof pursuant to this Clause
Fifth shall be repaid prior to the repayment of any such debts or
obligations to any General Partner or Affiliate thereof;
Seventh, to the Investment Limited Partner in an amount
equal to its Invested Amount;
Eighth, to the repayment to the General Partners of their
paid-in Capital Contributions minus any prior distributions made
to them under this Clause Eighth and Clause Second above, but
never an amount less than zero;
Ninth, except in the case of a refinancing, to each Partner
in an amount equal to the positive balance in his/her/its capital
account, after distributions to each Partner under Clauses First
through Eighth, above; and
Tenth, any balance 49.99% to the Investment Limited Partner,
.01% to the Special Limited Partner and 50% to the General
Partners.
10.3 Distributions Upon Dissolution
(a) Upon dissolution and termination, after payment of, or
adequate provision for, the debts and obligations of the
Partnership, the remaining assets of the Partnership shall be
distributed to the Partners in accordance with the positive
balances in their Capital Accounts after taking into account all
Capital Account adjustments for the Partnership taxable year,
including adjustments to Capital Accounts pursuant to Sections
10.1(b) and 10.3(b). In the event that a General Partner or
Additional Limited Partner has a negative balance in its Capital
Account following the liquidation of the Partnership or such
Partner's Interest, after taking into account all Capital Account
adjustments for the Partnership taxable year in which such
liquidation occurs, such Partner shall pay to the Partnership in
cash an amount equal to the negative balance in such Partner's
Capital Account. Such payment shall be made by the end of such
taxable year (or, if later, within 90 days after the date of such
liquidation) and shall, upon liquidation of the Partnership, be
paid to recourse creditors of the Partnership or distributed to
other Partners in accordance with the positive balances in their
Capital Accounts.
(b) With respect to assets distributed in kind to the
Partners in liquidation or otherwise, (i) any unrealized
appreciation or unrealized depreciation in the values of such
assets shall be deemed to be profits and losses realized by the
Partnership immediately prior to the liquidation or other
distribution event; and (ii) such profits and losses shall be
allocated to the Partners in accordance with Section 10.1(b), and
any property so distributed shall be treated as a distribution of
an amount in cash equal to the excess of such fair market value
over the outstanding principal balance of and accrued interest on
any debt by which the property is encumbered. For the purposes
of this Section 10.3(b), "unrealized appreciation" or "unrealized
depreciation" shall mean the difference between the fair market
value of such assets, taking into account the fair market value
of the associated financing (but subject to Section 7701(g) of
the Code), and the Partnership's adjusted basis for such assets
as determined under Regulation Section 1.704-1(b). This Section
10.3(b) is merely intended to provide a rule for allocating
unrealized gains and losses upon liquidation or other
distribution event, and nothing contained in this Section 10.3(b)
or elsewhere herein is intended to treat or cause such
distributions to be treated as sales for value. The fair market
value of such assets shall be determined by an appraiser to be
selected by the General Partner with the Consent of the
Investment Limited Partner.
10.4 Special Provisions
(a) Except as otherwise provided in this Agreement, all
profits, tax exempt income, losses, non-deductible non-
capitalizable expenditures, tax credits and cash distributions
shared by a class of Partners shall be shared by each Partner in
such class in the ratio of such Partner's paid-in Capital
Contribution to the paid-in Class Contribution of the class of
Partners of which such Partner is a member.
(b) Notwithstanding the foregoing provisions of this Article
X:
(i) If (a) the Partnership incurs recourse obligations or
Partner Non-Recourse Debt (including, without limitation,
Subordinated Loans) or (b) the Partnership incurs losses from
extraordinary events which are not recovered from insurance or
otherwise (collectively "Recourse Obligations") in respect of any
Partnership taxable year, then the calculation and allocation of
profits and losses shall be adjusted as follows: first, an amount
of deductions attributable to the Recourse Obligations shall be
allocated to the General Partner; and second, the balance of such
deductions shall be allocated as provided in Section 10.1(a).
(ii) If any profit arises from the sale or other disposition
of any Partnership asset which shall be treated as ordinary
income under the depreciation recapture provisions of the Code,
then the full amount of such ordinary income shall be allocated
among the Partners in the proportions that the Partnership
deductions from the depreciation giving rise to such recapture
were actually allocated. In the event that subsequently-enacted
provisions of the Code result in other recapture income, no
allocation of such recapture income shall be made to any Partner
who has not received the benefit of those items giving rise to
such other recapture income.
(iii) If the Partnership shall receive any purchase money
indebtedness in partial payment of the purchase price of the
Apartment Complex and such indebtedness is distributed to the
Partners pursuant to the provisions of Section 10.2(b) or Section
10.3, the distributions of the cash portion of such purchase
price and the principal amount of such purchase money
indebtedness hereunder shall be allocated among the Partners in
the following manner: On the basis of the sum of the principal
amount of the purchase money indebtedness and cash payments
received on the sale (net of amounts required to pay Partnership
obligations and fund reasonable reserves), there shall be
calculated the percentage of the total net proceeds distributable
to each class of Partners based on Section 10.2(b) or Section
10.3, as applicable, treating cash payments and purchase money
indebtedness principal interchangeably for this purpose, and the
respective classes shall receive such respective percentages of
the net cash purchase price and purchase money principal.
Payments on such purchase money indebtedness retained by the
Partnership shall be distributed in accordance with the
respective portions of principal allocated to the respective
classes of Partners in accordance with the preceding sentence,
and if any such purchase money indebtedness shall be sold, the
sale proceeds shall be allocated in the same proportion.
(iv) Income, gain, loss and deduction with respect to any
asset which has a variation between its basis computed in
accordance with Treasury Regulation Section 1.704-1(b) and its
basis computed for Federal income tax purposes shall be shared
among the Partners so as to take account of such variation in a
manner consistent with the principles of Section 704(c) of the
Code and Treasury Regulation Section 1.704-l(b)(2)(iv)(g).
(v) The terms "profits" and "losses" used in this Agreement
shall mean income and losses, and each item of income, gain,
loss, deduction or credit entering into the computation thereof,
as determined in accordance with the accounting methods followed
by the Partnership and computed in accordance with Treasury
Regulation Section 1.704-1(b)(2)(iv). Profits and losses for
Federal income tax purposes shall be allocated in the same manner
as set forth in this Article X, except as provided in Section
10.4(b)(iv).
(vi) If there is a net decrease in Partnership Minimum Gain
during a Partnership taxable year, each Partner will be allocated
items of income and gain for such year (and, if necessary,
subsequent years) in proportion to, and to the extent of, an
amount equal to such Partner's share of the net decrease in
Partnership Minimum Gain during the year before any other
allocation of Partnership items for such taxable year. A Partner
shall not be subject to this mandatory allocation of in come or
gain to the extent that any of the exceptions provided in
Treasury Regulation Section 1.704-2(f)(2)-1 applies. All
allocations pursuant to this Section 10.4(b)(vi) shall be in
accordance with Treasury Regulations Section 1.704-2(f). This
provision is a "minimum gain chargeback" within the meaning of
Treasury Regulation Section 1.704-2(f) and shall be construed as
such.
(vii) If there is a net decrease in Partner Non-Recourse
Debt Minimum Gain during a Partnership taxable year, then each
Partner with a share of the minimum gain attributable to such
debt at the beginning of such year will be allocated items of
income and gain for such year (and, if necessary, subsequent
years) in an amount equal to such Partner's share of the net
decrease in Partnership Non-Recourse Debt Minimum Gain during the
year. A Partner is not subject to this Partner Non-recourse Debt
Minimum Gain chargeback to the extent that any of the exceptions
provided in Treasury Regulations Section 1.704-2(i)(4) applied
consistently with Treasury Regulation Section 1.704-2(f)(2)-(5)
applies. Such allocations shall be made in a manner consistent
with the requirements of Treasury Regulation Section 1.704 and
under Section 704 of the Code.
(viii) If a Limited Partner unexpectedly receives (a) an
allocation of loss or deduction or expenditures described in
Section 705(a)(2)(B) of the Code made (1) pursuant to Section
704(e)(2) of the Code to a donee of an Interest, (2) pursuant to
Section 706(d) of the Code as the result of a change in any
Partner's Interest, or (3) pursuant to Regulation Section 1.751-
1(b)(2)(ii) as a result of a distribution by the Partnership of
unrealized receivables or inventory items or (b) a distribution,
and such allocation and/or distribution would cause the negative
balance in such Partner's Capital Account to exceed (i) such
Partner's share of Partnership Minimum Gain plus (ii) the amount
of such Partner's obligation, if any, to restore a negative
balance in such Partner's Capital Account plus (iii) such
Partner's share of Partner Non-recourse Debt Minimum Gain with
respect to which such Partner or a Related Person to such Partner
bears the Economic Risk of Loss, then such Partner shall be
allocated items of income and gain in an amount and manner
sufficient to eliminate such negative balance as quickly as
possible. For purposes of this Section 10.4(b)(viii), a
Partner's Capital Account shall be treated as reduced by
Qualified Income Offset Items.
(ix) In the event that any fee payable to the General
Partner or any Affiliate thereof shall instead be determined to
be a non-deductible, non-capitalizable distribution from the
Partnership to a Partner for Federal income tax purposes, then
there shall be allocated to such General Partner an amount of
gross income equal to the amount of such distribution.
(x) In applying the provisions of Article X with respect to
distributions and allocations, the following ordering of
priorities shall apply:
(1) Capital Accounts shall be deemed to be reduced by
Qualified Income Offset Items.
(2) Capital Accounts shall be reduced by distributions of
Cash Flow under Section 10.2(a).
(3) Capital Accounts shall be reduced by distributions from
Capital Transactions under Section 10.2(b).
(4) Capital Accounts shall be increased by any minimum gain
chargeback under Section 10.4(b)(vi) or Section 10.4(b)(vii).
(5) Capital Accounts shall be increased by any
qualified income offset under Section 10.4(b)(viii).
(6) Capital Accounts shall be increased by allocations of
profits under Section 10.1(a).
(7) Capital Accounts shall be reduced by allocations of
losses under Section 10.1(a).
(8) Capital Accounts shall be reduced by allocations of
losses under Section 10.1(b).
(9) Capital Accounts shall be increased by allocations of
profits under Section 10.1(b).
(xi) To the maximum extent permitted under the Code,
allocations of profits and losses shall be modified so that the
Partners' Capital Accounts reflect the amounts they would have
reflected if adjustments required by Sections 10.4(b)(vi),
10.4(b)(vii) and 10.4(b)(viii) had not occurred.
10.5 Authority of the General Partners to Vary Allocations to
Preserve and Protect the Partners' Intent
(a) It is the intent of the Partners that each Partner's
distributive share of profits, tax-exempt income, losses, non-
deductible non-capitalizable expenditures and credits (and items
thereof) shall be determined and allocated in accordance with
this Agreement to the fullest extent permitted by Section 704(b)
of the Code. In order to preserve and protect the determinations
and allocations provided for in this Agreement, the General
Partners are hereby authorized and directed to allocate profits,
tax-exempt income, losses, nondeductible non-capitalizable
expenditures and credits (and items thereof) arising in any year
differently than otherwise provided for in this Agreement to the
extent that allocating profits, tax-exempt income, losses,
nondeductible non-capitalizable expenditures or credits (or any
item thereof) in the manner provided for herein would cause the
determinations and allocations of each Partner's distributive
share of profits, tax-exempt income, losses, non-deductible non-
capitalizable expenditures, or credits (or any item thereof) not
to be permitted by Section 704(b) of the Code and the Treasury
Regulations promulgated thereunder. Any allocation made pursuant
to this Section 10.5 shall be deemed to be a complete substitute
for any allocation otherwise provided for in this Agreement, and
no amendment of this Agreement or approval of any Partner shall
be required.
(b) In making any allocation (the "New Allocation") under
Section 10.5(a), the General Partners are authorized to act only
after having been advised in writing by the Tax Accountants that,
under Section 704(b) of the Code, (i) the New Allocation is
necessary, and (ii) the New Allocation is the minimum
modification of the allocations otherwise provided for in this
Agreement necessary in order to assure that, either in the then-
current year or in any preceding year, each Partner's
distributive share of profits, tax-exempt income, losses, non-
deductible non-capitalizable expenditures, and credits (or any
item thereof) is determined and allocated in accordance with this
Agreement to the fullest extent permitted by Section 704(b) of
the Code.
(c) If the General Partners are required by Section 10.5(a)
to make any New Allocation in a manner less favorable to the
Limited Partners than is otherwise provided for herein, then the
General Partners are authorized and directed, only after having
been advised in writing by the Tax Accountants that such an
allocation is permitted by Section 704(b) of the Code, to
allocate profits, tax-exempt income, losses, non-deductible non-
capitalizable expenditures, and credits (and any item thereof)
arising in later years in such manner so as to bring the
allocations of profits, tax-exempt income, losses, non-deductible
non-capitalizable expenditures, and credits (and each item
thereof) to the Limited Partners as nearly as possible to the
allocations thereof otherwise contemplated by this Agreement.
(d) New Allocations made by the General Partners under
Section 10.5(a) and Section 10.5(c) in reliance upon the advice
of the Tax Accountants shall be deemed to be made pursuant to the
fiduciary obligation of the General Partners to the Partnership
and the Limited Partners, and no such allocation shall give rise
to any claim or cause of action by any Limited Partner.
ARTICLE XI
Management Agent
A. The General Partner shall engage the Management Agent to
manage the Apartment Complex pursuant to the Management
Agreement. The Management Agent shall receive a Management Fee of
those amounts payable from time to time by the Partnership to the
Management Agent for management services in accordance with a
management contract approved by the Agency (if such approval is
required) or, when the Apartment Complex is not subject to
Agency regulation, in accordance with a reasonable and
competitive fee arrangement. From and after the Admission Date,
the Partnership shall not enter into any Management Agreement or
modify or extend any Management Agreement unless the General
Partners shall have obtained the prior written consent of the
Special Limited Partner to the identity of the Management Agent
and the terms of the Management Agreement or the modification or
extension thereof.
B. Notwithstanding the foregoing, however, should the
Investment General Partner or an Affiliate thereof perform
property management services for the Partnership, property
management, rent-up or leasing fees shall be paid to the
Investment General Partner or such Affiliate only for services
actually rendered and shall be in an amount equal to the lesser
of (i) fees competitive in price and terms with those of non-
affiliated Persons rendering comparable services in the locality
where the Apartment Complex is located and which could reasonably
be available to the Partnership, or (ii) five percent (5%) of the
gross revenues of the Apartment Complex. No duplicate property
management fees shall be paid to any Person.
C. If (i) the Management Agent is the General Partner or an
Affiliate of the General Partner, and (a) the Apartment Complex
shall be subject to a substantial building code violation which
shall not have been cured within six months after notice from the
applicable governmental agency or department or (b) the
Partnership shall not have Cash Flow of at least $1,000 each
during year after 1997, or (ii) an Event of Bankruptcy shall
occur with respect to the Management Agent, or (iii) the
Management Agent shall commit willful misconduct or gross
negligence in its conduct of its duties and obligations under the
Management Agreement, then upon request by the Special Limited
Partner and subject to Agency approval, if required, the General
Partners must cause the Partnership to promptly terminate the
Management Agreement with the Management Agent and appoint a new
Management Agent selected by the Special Limited Partner, which
new Management Agent shall not be not an Affiliate of a General
Partner. Each General Partner hereby grants to the Special
Limited Partner an irrevocable (to the extent permitted by
applicable law) power of attorney coupled with an interest to
take any action and to execute and deliver any and all documents
and instruments on behalf of such General Partner and the
Partnership as the Special Limited Partner may deem to be
necessary or appropriate in order to effectuate the provisions of
this Article XI.C. Subject to Agency approval, if required, the
Partnership shall not enter into any future management
arrangement or renew or extend any existing management
arrangement unless such arrangement is terminable without penalty
upon the occurrence of the events described in this Article XI.
D. The Management Agent shall receive reasonable
compensation in accordance with the Management Agreement
submitted to, and approved by, the Investment Limited Partner and
the Special Limited Partner. Provided, however, that for any
period during which the Partnership fails to generate Cash Flow,
the Management Agent shall receive compensation in an amount not
to exceed one half the ordinary compensation provided for in the
Management Agreement.
E. The General Partners shall have the duty to manage the
Apartment Complex during any period when there is no Management
Agent.
ARTICLE XII
Books and Records, Accounting, Tax Elections, Etc.
12.1 Books and Records
The Partnership shall maintain all books and records which
are required under the Uniform Act under the Code for the Tax
Credit, or by any governmental agency having jurisdiction and may
maintain such other books and records as the General Partners in
their discretion deem advisable. Every Limited Partner, or its
duly authorized representatives, shall at all times have access
to the records of the Partnership at the principal office of the
Partnership at any reasonable times, and may inspect and copy any
of such records. A list of the names and addresses of all of the
Limited Partners shall be maintained as part of the books and
records of the Partnership and shall be mailed to any Limited
Partner upon request. A reasonable charge for copy work may be
charged by the Partnership. The General Partners shall maintain
and store all original tenant files in fire proof cabinets in a
secure location. Microfiche or other similar storage
technologies that are acceptable to the Investment Limited
Partner may also be utilized.
12.2 Bank Accounts
The bank accounts of the Partnership shall be maintained in
the Partnership's name with such financial institutions as the
General Partners shall determine. Withdrawals shall be made only
in the regular course of Partnership business on such signature
or signatures as the General Partners may determine. All
deposits (including security deposits and other funds required to
be escrowed by any Lender ) and other funds not needed in the
operation of the business shall be deposited, if required by
applicable law and to the extent permitted by applicable Agency
or Mortgage requirements, in interest-bearing accounts or
invested in United States Government obligations maturing within
one year.
12.3 Auditors
(a) The Auditors shall prepare, for execution by the General
Partners, all tax returns of the Partnership. Prior to the
filing of the Partnership tax returns, and in no event later than
February 1 of each year, the Auditors shall deliver the tax
returns for such year to the Tax Accountants for their review and
comment. If a dispute arises between the Auditors and the Tax
Accountants over the proper preparation of the tax returns and
such dispute cannot be resolved by the Auditors and the Tax
Accountants by March 1 of such year, then the Tax Accountants
shall make the final decision on whether any changes are
necessary. The Partnership shall reimburse BCCLP for all
reasonable costs and expenses paid to the Tax Accountants for the
aforementioned services.
(b) The Auditors shall audit and certify all annual
financial reports to the Partners in accordance with generally
accepted auditing standards.
12.4 Cost Recovery and Elections
(a) With respect to all depreciable assets for which cost
recovery deductions are permitted, the Partnership shall elect to
use, so far as permitted by the provisions of the Code,
accelerated cost recovery methods. However, the Partnership may
change to another method of cost recovery if such other method
is, in the opinion of the Auditors, more advantageous to the
Investment Limited Partner and the Limited Partners and/or
holders of beneficial assignee certificates thereof.
(b) Subject to the provisions of Section 12.5, all other
elections required or permitted to be made by the Partnership
under the Code shall be made by the General Partners in such
manner as will, in the opinion of the Auditors, be most
advantageous to the Investment Limited Partner and the limited
partners and/or holders of beneficial assignee certificates
thereof.
12.5 Special Basis Adjustments
In the event of a transfer of all or any part of the
Interest of the Investment Limited Partner or a transfer of all
or any part of an interest of a partner and/or holders of
beneficial assignee certificates of the Investment Limited
Partner, the Partnership shall elect, upon the request of the
Investment Limited Partner, pursuant to Section 754 of the Code,
to adjust the basis of the Partnership property. Any adjustments
made pursuant to said Section 754 shall affect only the successor
in interest to the transferring Partner or partner or holder of
beneficial assignee certificate thereof. Each Partner will
furnish the Partnership all information necessary to give effect
to such election.
12.6 Fiscal Year
The fiscal and tax year of the Partnership shall be the
calendar year. The books of the Partnership shall be kept on an
accrual basis.
12.7 Information to Partners
(a) The General Partners shall cause to be prepared and
distributed to all Persons who were Partners at any time during a
fiscal year of the Partnership:
(i) Within sixty (60) days after the end of each fiscal year
of the Partnership, (A) a balance sheet as of the end of such
fiscal year, a statement of income, a statement of partners'
equity, and a statement of cash flows, each for the year then
ended, all of which, except the statement of cash flows, shall be
prepared in accordance with generally accepted accounting
principles and accompanied by a report of the Auditors containing
an opinion of the Auditors, and (B) a report of the activities of
the Partnership during the period covered by the report. With
respect to any distribution to the Investment Limited Partner,
the report called for shall separately identify distributions
from (1) Cash Flow from operations during the period, (2) Cash
Flow from operations during a prior period which had been held as
reserves, (3) proceeds from disposition of property and
investments, (4) lease payments on net leases with builders and
sellers, (5) reserves from the gross proceeds of the Capital
Contribution of the Investment Limited Partner, (6) borrowed
monies, and (7) transactions outside of the ordinary course of
business with a description thereof.
(ii) Within thirty (30) days after the end of each fiscal
year of the Partnership, all information relating to the
Partnership and/or the Apartment Complex which is necessary, in
the view of the Tax Accountants, for the preparation of the
Limited Partners' Federal income tax returns.
(iii) Within thirty (30) days after the end of each quarter
of a fiscal year of the Partnership, a report containing:
(A) a balance sheet, which may be unaudited;
(B) a statement of income for the quarter then ended, which
may be unaudited;
(C) a statement of cash flows for the quarter then ended,
which may be unaudited;
(D) all other information which would be pertinent
to a reasonable investor regarding the Partnership and its
activities during the quarter covered by the report.
(b) Within sixty (60) days after the end of each fiscal year
of the Partnership a copy of the annual report to be filed with
the United States Treasury concerning the status of the Apartment
Complex as low-income housing and, if required, a certificate to
the appropriate state agency concerning the same.
(c) Upon the written request of the Investment Limited
Partner for further information with respect to any matter
covered in item (a) or item (b) above, the General Partners shall
furnish such information within thirty (30) days of receipt of
such request.
(d) Prior to October 15 of each year, the Partnership shall
send to the Investment Limited Partner an estimate of the
Investment Limited Partner's share of the tax credits, profits
and losses of the Partnership for Federal income tax purposes for
the current fiscal year. Such estimate shall be prepared by the
General Partners and the Auditors.
(e) Within fifteen (15) days after the end of any calendar
quarter during which:
(i) there is a material default by the Partnership under the
Project Documents or in payment of any mortgage, taxes, interest
or other obligation on secured or unsecured debt,
(ii) any reserve has been reduced or terminated by
application of funds therein for purposes materially different
from those for which such reserve was established,
(iii) any General Partner has received any notice of a
material fact which may substantially affect further
distributions or Tax Credit allocations to any Limited Partner,
or
(iv) any Partner has pledged or collateralized its Interest
in the Partnership,
the General Partners shall send the Investment Limited Partner a
detailed report of such event.
(f) After the Admission Date, the Partnership shall send to
the Investment Limited Partner, on or before the tenth day of
each month, the monthly housing credit monitoring form, and
copies of all applicable periodic reports covering the status of
project operations from the previous period, as may be required
by any Agency or the Authority .
(g) Within fifteen (15) days after the end of each quarter
of the Partnership's fiscal year, the Partnership shall send to
the Investment Limited Partner a report on operations, in the
form supplied by the Investment Limited Partner.
(h) The General Partners shall cause the Partnership to send
to the Investment Limited Partner a copy of each Construction
Mortgage draw requisition and any notification or correspondence
from the Construction Lender indicating that any such draw will
not be paid as requisitioned. Upon receipt, the Partnership
shall send to the Investment Limited Partner copies of the
Form(s) 8609 evidencing the Tax Credit allocation.
(i) If the earlier of (A) the Completion Date or (B) the
date upon which tenants first occupied apartment units in the
Apartment Complex shall have occurred six months or more prior to
the date upon which the Investment Limited Partner acquired its
Interest in the Partnership, then the General Partners shall
cause to be prepared and delivered to the Investment Limited
Partner within sixty (60) days of the Admission Date the
following items:
(i) An unaudited statement of income of the Partnership for
the year (or such shorter period as there may be from the date of
the most recent audited statement of income of the Partnership)
ended on the date upon which the Investment Limited Partner
acquired its Interest in the Partnership; and
(ii) An audited statement of income of the Partnership for
any fiscal year of the Partnership ending between (A) the earlier
of (1) the Completion Date or (2) the date upon which tenants
first occupied apartment units in the Apartment Complex and (B)
the date upon which the Investment Limited Partner acquired its
Interest in the Partnership.
(j) By December 1 of each year, the Partnership shall send
to the Investment Limited Partner the Property's operating budget
for the following year.
(k) If the General Partners do not cause the Partnership to
fulfill its obligations under Section 12.7(a)(i) and/or Section
12.7(a)(ii) within the time periods set forth therein, the
General Partners may be required by the Investment Limited
Partner to pay as damages the sum of $100 per day (plus interest
at a rate equal to the general base rate of interest established
by The First National Bank of Boston or its successors and
assigns and announced by it as the rate charged by it to its
prime commercial customers on short-term unsecured borrowings as
its "base rate" from time to time in effect plus 3%) to the
Investment Limited Partner until such obligations shall have been
fulfilled; provided, however, that said penalty shall not be
applied should the failure to provide such reports and
information be beyond the control of the General Partner. Such
damages shall be paid forthwith by the General Partners, and
failure to so pay shall constitute a material default of the
General Partners hereunder. In addition, if the General Partners
shall so fail to pay, the General Partners and their Affiliates
shall forthwith cease to be entitled to the Annual Partnership
Management Fee, and to the payment of any Cash Flow or Capital
Transaction proceeds to which they may otherwise be entitled
hereunder. Such payments of the Annual Partnership Management
Fee, Cash Flow and Capital Transaction proceeds shall be restored
only upon the payment of such damages in full, and any amount of
such damages not so paid shall be deducted against payments of
the Annual Partnership Management Fee, Cash Flow and Capital
Transaction proceeds otherwise due to the General Partners or
their affiliates.
12.8 Expenses of the Partnership
(a) All expenses of the Partnership shall be billed directly
to and paid by the Partnership.
(b) Except in extraordinary circumstances, neither the
Investment General Partner nor any Affiliate thereof shall be
permitted to contract or otherwise deal with the Partnership for
the sale of goods or services or the lending of money to the
Partnership or the General Partners, except for (i) management
services, subject to the restrictions set forth in Article XI.B.,
(ii) loans made by, or guaranteed by, the Investment General
Partner or any of its Affiliates, and (iii) those dealings,
contracts or provision of services described in the Investment
Partnership Agreement or in the Prospectus. Extraordinary
circumstances shall only be presumed to exist where there is an
emergency situation requiring immediate action and the services
required are not immediately available from unaffiliated parties.
All services rendered under such circumstances must be rendered
pursuant to a written contract which must contain a clause
allowing termination without penalty on sixty (60) days' notice.
Goods and services provided under such circumstances must be
provided at the lesser of actual cost or the price charged for
such goods or services by independent parties.
(c) In the event extraordinary circumstances arise, the
Investment General Partner and its Affiliates may provide
construction services in connection with the Apartment Complex.
Neither the Investment General Partner nor any of its Affiliates
shall provide such services unless it believes it has an adequate
staff to do so and unless such provision of goods and
construction services is part of its ordinary and ongoing
business in which it has previously engaged, independent of the
activities of the Investment Limited Partner. Any such services
must be reasonable for and necessary to the Investment Limited
Partner, actually furnished to the Investment Limited Partner,
and provided at the lower of ten percent (10%) of the
construction contract rate with respect to the Apartment Complex
or ninety percent (90%) of the competitive price charged for such
services by independent parties for comparable goods and services
in the same geographic location (except that in the case of
transfer agent, custodial and similar banking-type fees, and
insurance fees, the compensation, price or fee shall be at the
lesser of costs or the compensation, price or fee of any other
Person rendering comparable services as aforesaid). Cost of
services as used herein means the pro rata cost of personnel,
including an allocation of overhead directly attributable to such
personnel, based on the amount of time such personnel spent on
such services or other method of allocation acceptable to the
accountants for the Investment Limited Partner.
(d) All services provided by the Investment General Partner
or any Affiliate thereof pursuant to Section 12.8(c) must be
rendered pursuant to the Investment Partnership Agreement or a
written contract which precisely describes the services to be
rendered and all compensation to be paid and shall contain a
clause allowing termination without penalty upon sixty (60) days'
notice to the Investment General Partner by a vote of a majority
in interest of the limited partners and assignees of beneficial
interests in the Investment Limited Partner.
(e) No compensation or fees may be paid by the Partnership
to the Investment General Partner or its Affiliates except as
described in the Investment Partnership Agreement or in the
Prospectus.
ARTICLE XIII
General Provisions
13.1 Restrictions by Reason of Section 708 of the Code
No Disposition may be made if the Interest sought to be
Disposed of, when added to the total of all other Interests
Disposed of within the period of twelve consecutive months prior
to the proposed date of the Disposition, could, in the opinion of
tax counsel to the Partnership, result in the termination of the
Partnership under Section 708 of the Code. This Section 13.1
shall have no application to any required repurchase of the
Investment Limited Partner's Interest. Any Disposition in
contravention of any of the provisions of this Section 13.1 shall
be void ab initio and ineffectual and shall not bind or be
recognized by the Partnership. Notwithstanding the foregoing
provisions of this Section 13.1, however, the Investment Limited
Partner may waive the provisions of this Section 13.1 at any time
as to a Disposition or series of Dispositions, and in the event
of such a waiver, this Section 13.1 shall have no force or effect
upon such Disposition or series of Dispositions.
13.2 Amendments to Certificate
Within one hundred twenty (120) days after the end of any
Partnership fiscal year in which the Investment Limited Partner
shall have received any distributions under Article X, the
General Partners shall file an amendment to the Certificate
reducing by the amount of its allocable share of such
distribution the amount of Capital Contribution of the Investment
Limited Partner as stated in the last previous amendment to the
Certificate if such Amendment is required under the Uniform Act
to reduce any liability of the Investment Limited Partner to
partnership creditors. However, Schedule A shall not be amended
on account of any such distribution.
The Partnership shall amend the Certificate at least once
each calendar quarter to effect the substitution of Substituted
Limited Partners, although the General Partners may elect to do
so more frequently. In the case of assignments, where the
assignee does not become a Substituted Limited Partner, the
Partnership shall recognize the assignment not later than the
last day of the calendar month following receipt of notice of
assignment and all documentation required in connection therewith
hereunder.
Notwithstanding the foregoing provisions of this Section
13.2, no such amendments to the Certificate need be filed by the
General Partners if the Certificate is not required to and does
not identify the Limited Partners or their Capital Contributions
in such capacity.
13.3 Notices
Any notice called for under this Agreement shall be in
writing and shall be deemed adequately given if actually
delivered or if sent by registered or certified mail, postage
prepaid, to the party for whom such notice is intended at such
party's last address of record on the Partnership books.
13.4 Word Meanings
The words such as "herein," "hereinafter," "hereof" and
"hereunder" refer to this Agreement as a whole and not merely to
a subdivision in which such words appear unless the context
otherwise requires. The singular shall include the plural, and
vice versa, and each gender (masculine, feminine and neuter)
shall include the other genders, unless the context requires
otherwise. Each reference to a "Section" or an "Article" refers
to the corresponding Section or Article of this Agreement, unless
specified otherwise. References to Treasury Regulations
(permanent or temporary) or Revenue Procedures shall include any
successor provisions.
13.5 Binding Effect
The covenants and agreements contained herein shall be
binding upon and inure to the benefit of the heirs, executors,
administrators, successors and assigns of the respective parties
hereto.
13.6 Applicable Law
This Agreement shall be construed and enforced in accordance
with the laws of the State.
13.7 Counterparts
This Agreement may be executed in several counterparts and
all so executed shall constitute one agreement binding on all
parties hereto, notwithstanding that all the parties have not
signed the original or the same counterpart.
13.8 Financing Regulations
So long as any of the Project Documents are in effect, (a)
each of the provisions of this Agreement shall be subject to, and
the General Partners covenant to act in accordance with, the
Project Documents; (b) the Project Documents shall govern the
rights and obligations of the Partners, their heirs, executors,
administrators, successors and assigns to the extent expressly
provided therein; (c) upon any dissolution of the Partnership or
any transfer of the Apartment Complex, no title or right to the
possession and control of the Apartment Complex and no right to
collect the rent therefrom shall pass to any Person who is not,
or does not become, bound by the Project Documents and other
Project Documents in a manner satisfactory to the Lender or any
Agency ; (d) no amendment to any provision of the Project
Documents shall become effective without the prior written
consent of the Lender or any Agency (if required); and (e) the
affairs of the Partnership shall be subject to Agency regulation
and no action shall be taken which would require the consent or
approval of any Agency unless the same is first obtained. No
new Partner shall be admitted to the Partnership, and no Partner
shall withdraw from the Partnership or be substituted for without
the consent of the Lender or any Agency (if such consent is then
required). No amendment to this Agreement relating to matters
governed by Agency regulations or requirements shall become
effective until the prior written consent of the Agency (if
required) to such amendment shall have been obtained.
Any conveyance or transfer of title to all or any portion of
the Apartment Complex required or permitted under this Agreement
shall in all respects be subject to all conditions, approvals and
other requirements of Agency rules and regulations applicable
thereto.
13.9 Separability of Provisions
Each provision of this Agreement shall be considered
separable and (a) if for any reason any provision is determined
to be invalid, such invalidity shall not impair the operation of
or affect those portions of this Agreement which are valid, and
(b) if for any reason any provision would cause the Investment
Limited Partner to be bound by the obligations of the Partnership
(other than the rules and regulations of any Lender and the
requirements of any other Lender), such provision or provisions
shall be deemed void and of no effect.
13.10 Paragraph Titles
All article and section headings in this Agreement are for
convenience of reference only and are not intended to qualify the
meaning of any article or section.
13.11 Amendment Procedure
This Agreement may be amended by the General Partners only
with the Consent of the Investment Limited Partner and the prior
written consent of the Special Limited Partner.
13.12 Time of Admission
The Investment Limited Partner shall be deemed to have been
admitted to the Partnership as of the Commencement Date for all
purposes of this Agreement, including Article X hereof; provided,
however, that if regulations are issued under the Code or an
amendment to the Code is adopted which would require, in the
opinion of the Auditors, that the Investment Limited Partner be
deemed admitted on a date other than as of the Commencement Date,
then the General Partners shall select a permitted admission date
which is most favorable to the Investment Limited Partner.
[NO FURTHER TEXT ON THIS PAGE]
WITNESS the execution hereof under seal as of the 1st day of
December, 1997.
ORIGINAL (WITHDRAWING)
LIMITED PARTNER(S): GENERAL PARTNER(S):
PRAIRIE WEST, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, its
President
INVESTMENT LIMITED PARTNER: SPECIAL LIMITED PARTNER:
BOSTON CAPITAL BCTC 94, INC.
TAX CREDIT FUND IV L.P.,
a Delaware
limited partnership By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, Attorney-
in-Factfor ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
its duly authorized President
By: Boston Capital Associates IV,
L.P., a Delaware limited
partnership, its general partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇,
Attorney-In-Fact for
▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
a general partner
CONSENT AND AGREEMENT
The undersigned hereby executes this Agreement for the sole
purpose of agreeing to the provisions of Article XI of the
foregoing Second Amended and Restated Agreement and Certificate
of Limited Partnership notwithstanding any provision of the
Management Agreement to the contrary.
Management Agent
VALLEY RENTAL SERVICE
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
its President
GUARANTY
The undersigned unconditionally guarantees the performance
by the General Partner of all of its obligations under Sections
5.1, 5.2, 6.5, 6.10, 6.11(a) and 12.7(k) of this Second Amended
and Restated Agreement and Certificate of Limited Partnership and
hereby waive any right to require that any action be brought
against any other Person or to require that resort be made to any
security prior to enforcement of this guaranty. The obligations
of the undersigned hereunder shall be binding upon the respective
heirs, executors and legal representatives of the undersigned.
Execution of this Agreement by the undersigned is solely for the
purposes of undertaking this guaranty and shall not be deemed to
make the undersigned a partner of the partnership.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Individually
STATE OF ___________________ )
) ss.
COUNTY OF __________________ )
BEFORE ME, the undersigned Notary Public in and for said
County and State, personally appeared the above-named ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇, known to me to be the person who executed the
foregoing instrument, and, being duly sworn, acknowledged that
the statements therein contained are true and that he did sign
the same as his free act and deed.
WITNESS my hand and official seal this ______ day of
_________, 19__.
_________________________
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
STATE OF ___________________ )
) ss.
COUNTY OF __________________ )
BEFORE ME, the undersigned Notary Public in and for said
County and State, personally appeared the above-named ▇▇▇▇▇▇
▇▇▇▇▇▇▇, known to me to be the President of Prairie West, Inc.,
who being duly sworn, acknowledged that the statements therein
contained are true and that he did sign the same as his free act
and deed and that the same is the duly authorized free act and
deed of Prairie West, Inc.
WITNESS my hand and official seal this ______ day of
_________, 19__.
_________________________
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
STATE OF ___________________ )
) ss.
COUNTY OF __________________ )
BEFORE ME, the undersigned Notary Public in and for said
County and State, personally appeared the above-named
________________, known to me to be the _______________________of
Valley Rental Service, who, being duly sworn, acknowledged that
the statements therein contained are true and that he did sign
the same as his free act and deed and that the same is the duly
authorized free act and deed of Valley Rental Service.
WITNESS my hand and official seal this ______ day of
_________, 19__.
_________________________
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
STATE OF ___________________ )
) ss.
COUNTY OF __________________ )
BEFORE ME, the undersigned Notary Public in and for said
County and State, personally appeared the above-named ▇▇▇▇▇▇
▇▇▇▇▇▇▇, known to me to be the person who executed the foregoing
instrument, and, being duly sworn, acknowledged that the
statements therein contained are true and that he did sign the
same as his free act and deed.
WITNESS my hand and official seal this ______ day of
_________, 19__.
_________________________
Notary Public
_________________________
Name (Printed)
My Commission Expires:
My County of Residence:
STATE OF MASSACHUSETTS
COUNTY OF SUFFOLK
Personally appeared before me, the undersigned authority in
and for said County and State, on this _______ day of
____________, 19__, within my jurisdiction, the within named
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, Attorney in Fact for ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, who
acknowledged that he is a general partner of Boston Capital
Associates, which is the general partner of Boston Capital
Associates, and the President of Boston Capital Partners
Corporation, which are the general partners of Boston Capital Tax
Credit Fund IV, L.P., and that in said representative capacity
she executed the above and foregoing instrument, after first
having been duly authorized to do so.
(Notary Public)
My Commission Expires:
___________________________
STATE OF MASSACHUSETTS
COUNTY OF SUFFOLK
Personally appeared before me, the undersigned authority in
and for said County and State, on this _______ day of
____________, 19__, within my jurisdiction, the within named
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, Attorney in Fact for ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, who
acknowledged that he is the President of BCTC 94, Inc., a
Massachusetts corporation, and that for and on behalf of the said
corporation, and as its act and deed she executed the above and
foregoing instrument, after first having been duly authorized by
said corporation to do so.
(Notary Public)
My Commission Expires:
___________________________
Country Edge Apartments I Limited Partnership
Schedule A
As of December 1, 1997
General Partners Capital Contribution
Prairie West, Inc. $100
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Special Limited Partner Capital Contribution
BCTC 94, Inc. $10
c/o Boston Capital
Partners, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Investment Total Agreed-to Paid-In
Limited Partner Capital Contribution Capital Contribution
Boston Capital $1,128,905 $564,509
Tax Credit Fund IV, L.P.
A Limited Partnership
c/o Boston Capital
Partners, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
____________________________
Paid-in Capital Contribution as of the date of this Schedule A.
Future Installments of Capital Contribution are subject to
adjustment and are due at the times and subject to the conditions
set forth in the Agreement to which this Schedule is attached.